Legal advice: Problems with holidays and holiday pay

It appears that summertime is at last with us, and no doubt people will soon be off on their holidays.

For several years there have been statutory rules governing an employee's entitlement to paid annual holiday. Some employers also supplement the minimum statutory rules with extra holiday provisions in employment contracts.

The statutory rules themselves have not been without problems, two of which include the entitlement of part-time workers to paid holiday, and the specific calculation of holiday pay.

As a matter of law, part-time workers should be given the same leave entitlement pro rata as their full-time colleagues. For example:

• where an employer gives its full-time workers 25 days holiday each year, a part-time worker who works 2.5 hours each day should be given 25 days holiday paid at their usual rate of 2.5 hours a day
• an employee who works three days each week would be entitled to three-fifths of the 25 day leave entitlement, that is 15 days. This would be paid at the worker's usual rate.

A worker should be paid at the rate of a week's pay for each week of holiday, although the calculation of a week's pay can sometimes be complicated and in those circumstances an employer should seek professional advice on the matter.

There are often issues over whether overtime should be included in the calculation of holiday pay, although fortunately the law on this matter is settled. If an employee has normal working hours, overtime will only be included in the calculation of holiday pay where it is fixed under the employment contract. This means that an employee who works a lot of non-contractual overtime will find that these hours are not included in the calculation of their holiday pay, which does seem a rather arbitrary rule.

As calculating both a part-time employee's entitlement to holiday and the amount of holiday pay can be a tricky technical process, any employee or employer who is unsure of the position would be best advised to seek legal advice. This is especially so now that the government has started consultation to increase minimum annual leave from 20 to 28 days.