Part-time workers could be entitled to full-time leave

Part-time positions are a great way to expand your company gradually and affordably. They’re also a good option for retaining talented people when their personal circumstances change. But there are detailed administration challenges involved in managing the needs of part-time employees alongside full-time team members.

One admin challenge is calculating how much holiday part-time staff are entitled to. And a new legal ruling could make that calculation more complex for UK companies whose part-time employees work irregular hours...

How much holiday are part-time staff entitled to?

Legally, most countries have a statutory annual leave entitlement for employees. In the UK, workers who work a 5-day week must receive at least 28 days’ paid annual leave a year. This is the equivalent of 5.6 weeks of holiday. An employer can include bank holidays as part of statutory annual leave.

Part-time employees are entitled to the same amount of holiday, calculated pro-rata in line with their contract. For example, if someone is working three days per week, they are entitled to 16.8 days’ holiday per year (which most employers will round up to 17 days). This calculation is called the “calendar method”, as it is based on total leave entitlement across a calendar year.

If you’re not confident with making annual leave calculations, there are online part-time leave calculators that can work out holiday allowances on your behalf.

The calendar method works easily for part-time staff on permanent, regular hour contracts. It’s also an effective holiday calculation method for 12-month fixed term contract employees. But when a team member is working shifts or irregular hours, companies use a different system.

Shift workers and people working irregular hours accrue paid time off based on the number of hours they work. For example, someone working an average of 15 hours per week across three days would be entitled to 84 hours’ paid holiday per year. This is called the “percentage method”.

Can companies change the way they calculate part-time leave?

Calculating holiday entitlement based on part-time employees’ contractual arrangements seems straightforward. However, a recent legal case shows the major implications of either miscalculating people’s leave allowance, or changing the way in which is it calculated.

A part-time teacher pursued legal action after the trust under which she worked changed her holiday allowance. Originally, her leave entitlement had been calculated using the calendar method. However, due to her working irregular hours, the trust switched to the percentage method – calculating her paid leave allowance at the end of each term. As a result, her income decreased as she was entitled to less paid time off during the school holidays.

The teacher took the trust to an employment tribunal for unlawful deduction of wages. The claim was initially dismissed. But after appealing, the Supreme Court ruled in her favour. She is now entitled to the same amount of leave as teachers working full-time throughout the academic year, as stated in her original employment contract.

Could employers face more legal disputes about annual leave?

The recent legal case has raised important issues surrounding statutory leave calculation for part-time workers such as teachers, who operate irregular hours.

While teaching contracts continue throughout the year, teachers only work during certain weeks. This produces an irregular working pattern, which makes it difficult to calculate an appropriate holiday allowance.

The Supreme Court has acknowledged that using the percentage method to calculate holiday pay for teachers is not unlawful. However, keeping track of exactly how many hours teachers work during each term can be complex. Particularly if schools and academic institutions don’t have a workforce management system in place.

As a result, the door is now open for other teachers and permanently employed professionals working irregular hours to campaign for the same holiday entitlement as full-time team members. In addition to costing organisations more, staff affected by the change could also claim for back pay – increasing the financial burden being placed on employers.

Some organisations may decide that the “safest” thing to do is to offer all employees the same amount of annual leave. However, if you choose to take this route, be prepared that full-time staff could think it’s unfair that people working fewer hours are entitled to the same number of days off.

How can your company improve annual leave management?

Part-time staff on irregular hours are one example of the HR complexities involved in running a successful business. The average company will have employees on a mixture of contract types, which will affect statutory allowances such as paid time off.

To keep pace with the legal entitlements of all team members, it’s important to have a clear and trustworthy platform for managing HR requirements. Many companies are turning to software traditionally used for online shift planning, such as WhosOffice, to document the number of hours worked by each staff member. They then use this data to underpin holiday entitlement calculations.

WhosOffice stands out from other shift planning platforms because we’ve integrated holiday management tools alongside staff scheduling software. This means companies in sectors like education can monitor staffing holistically, to support everyone’s needs in line with their legal entitlements.

Learn more about how WhosOffice supports staff planning in education or start your free WhosOffice trial today.