Calculating part-time workers’ holiday entitlement can quickly become a complicated matter. However, employers are under an obligation both to ensure term-time workers receive at least the statutory minimum entitlement of 5.6 weeks’ paid annual leave a year, and that they are not treated less favourably than full-time workers.
The following guide for employers examines the rules relating to term time only contracts holiday pay, including pay reference period rules relating to workers without fixed hours or fixed pay.
Who is classed as a term time worker?
A term time worker is someone who is contracted to work a certain number of weeks per year, where their non-working time is scheduled at regular, planned periods and is accounted for by a combination of annual leave and unpaid leave.
There are various different types of term time worker depending on the specific nature of their contract. A term time worker can be employed on a full-time or part-time basis, and under a permanent or temporary contract. A term time worker can even be employed intermittently, working during term time periods as and when the need arises.
Where employed under either a full-time or part-time permanent contract, the worker should usually be paid their normal weekly rate of pay for all school holiday periods. However, other term time workers will only usually be paid for hours actually worked and so not during school holiday periods. This includes:
- Workers paid by the hour
- Supply teachers provided by an agency
- Temporary workers on a short term contract
- Workers on a zero hours contract
Term time holiday accrual
The leave year can be set by the employer, for example, to run from 1 January to 31 December, during which time the worker must take their leave entitlement, although often the contract of employment will only allow workers to take their annual leave during the school holidays.
In the absence of any express contractual entitlement to paid holiday, the term time worker will begin to accrue the statutory minimum as soon as they start their term time job.
If the worker started their job part way through the leave year, they will only be entitled to the part of their total annual leave entitlement accrued for that year. Where a statutory leave year has not been set, this will start on the first day of a new job. For term time workers on permanent contracts, the statutory entitlement to paid holiday accrues in exactly the same way as those employees who work all year round, namely, monthly in advance at a rate of 1/12 of their annual entitlement.
Term time holiday entitlement
With the exception of those who are genuinely self-employed, all workers are legally entitled to 5.6 weeks’ paid holiday per annum. For someone working full time, 5 days a week, this equates to a total of 28 days a year, although bank holidays and public holidays can be included as part of that statutory leave entitlement.
Many term time workers will have employment contracts entitling them to additional paid holiday beyond the statutory minimum.
For term time workers who are not retained by their employer between periods of work, for example, they are paid by the hour, work as a supply teacher, or are working under a short term or zero hours contract, the position was clarified by the Supreme Court in Harpur Trust v Brazel in 2022. Under this ruling, workers on permanent contracts who do not work the entirety of the year – such as term time workers – are legally entitled to a minimum of 5.6 weeks’ holiday a year and this entitlement cannot be pro-rated on account of the weeks they are not required to work. This is a change to the previous standard practice of pro-rating entitlement and calculating their paid holiday entitlement based on the number of hours worked.
While term time workers are entitled to 5.6 weeks’ annual leave, this will not in practice necessarily equate to 28 days’ holiday. A worker’s actual entitlement will be determined by their regular working pattern during the part of the year they are required to work. As an example, if the worker is contracted to work four days during 39 weeks of term time, the calculation is 5.6 x 4 = 22.4 days.
Holiday pay entitlement
The amount of pay that a term time worker should receive for any holiday they take will depend on the amount of hours they work and how they are paid for those hours. The general principle is that holiday pay received by a worker should reflect what they would have earned if they had been at work.
This will depend on the term time worker’s contract. If they have a permanent contract, on either a full-time or part-time basis, it is likely they will be paid their normal weekly rate of pay.
When a worker does not work fixed or regular hours, and so does not receive the same amount of pay each week, month or other specified pay period, and is not paid during school holiday periods, the situation becomes more complicated.
In these circumstances an employer should look back at the previous 52 paid weeks to calculate what that term time worker should be paid for a week’s leave. This is known as the holiday pay reference period.
Holiday pay should be calculated by reference to average earnings over 52 weeks, not by reference to the hours worked.
The pay reference period must include the last 52 weeks for which the worker was actually paid, substituting any whole weeks in which no pay was received for weeks in which pay, however minimal, was received.
If a term time worker has not been in employment for long enough to build up 52-weeks pay data, their employer should use as many complete weeks of data they have. For example, if a worker has been with their employer for 40 complete weeks, that is what the employer should use, ignoring any weeks in which no remuneration was payable.
There will also be a limitation on how far employers should look back to reach 52 weeks’ of pay data. Any weeks that are before 104 complete weeks prior to the first day of the worker’s holiday are not included.
DavidsonMorris’ employment law specialists are experienced in all aspects of workforce entitlements, including issues relating to holiday pay and workers with flexible working arrangements. For advice, contact our employment law specialists.
Term time holiday FAQs
How is term time holiday pay calculated?
As of 6 April 2020, holiday pay for term time workers without fixed hours should be based on the average hours worked during the 52 weeks before, not counting any weeks not worked and for which no pay was received.
What does term time only pay mean?
Some term time workers may only be paid for the hours of work undertaken during term time, and not for school holidays. However, all workers, even term time workers, are entitled to a minimum of 5.6 weeks paid holiday per annum on a pro rata basis.
Do school staff get paid during the holidays?
Whether school staff get paid during holidays will depend on their contract of employment. All workers, including term time workers, are entitled to 5.6 weeks paid leave per annum, where school staff may be contractually required to take their leave during school holidays.
Last updated: 1 August 2022