Why is Fourth retiring the Casual Holiday functionality?
- For many years, employers have used the 12.07% method for calculating holiday allowance for part-year or ad-hoc workers. This calculation was set out in ACAS Guidance (now withdrawn), where they said that a holiday entitlement of 5.6 weeks is equivalent to 12.07% of hours worked over a year.
- In 2019, an Employment Appeals Tribunal, in response to Harpur Trust v Brazel, held that the 12.07% method is legally incorrect and holiday should not be calculated on a pro-rata basis in this way. The Court of Appeal stated that all employees are entitled to 5.6 weeks holiday a year which should be calculated using an average week's pay in accordance with the Working Time Directive (WTD) and Employment rights Act 1996, otherwise referred to as the Calendar Week Method.
- The Harpur Trust appealed this ruling, and it was referred to the Supreme Court where it was heard on 9th November 2021. The judgement of this appeal was published on 20th July 2022, when the Supreme Court dismissed the appeal and agreed with the ruling that the 12.07% method to calculate holiday is unlawful.
What is this group for?
- We encourage any and all questions regarding the technical capabilities available to you when considering changing employment types. Please note Fourth can not provide any advice on the suitability of employment types for your business and we encourage you to seek advice on the most appropriate employee categorization for your workforce.
Please remember that all questions here will be visible to the Fourth community so please do not provide confidential data as examples.
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