GLAA Holiday Pay Brief

• The GLAA has published guidance on their view of the valid and invalid methods of calculating holiday pay and the accrual of leave for workers without fixed hours or fixed rates of pay.  This links into their ‘critical’ Licensing Standard 2.5
• This brief has been published as a result of the Harpur Trust v Brazel Supreme Court judgement which confirmed that a part year employee remained employed for a full year and so, was entitled to 5.6 weeks paid holiday in each leave year (despite having periods where they did not undertake any work)
• The GLAA’s brief sets out their position on workers
• They state that all workers are entitled to 5.6 weeks paid holiday including workers under contracts described as casual, irregular and/or zero-hours and part year workers
• The GLAA confirm that they consider calculating annual leave entitlement which only considers days on which the worker has worked or using the 12.07% calculation is invalid
• Similarly, they consider calculating holiday pay for workers without fixed hours or rates of pay at 12.07% is invalid
• The GLAA state that contracts that contain terms stating that the contract between the worker and applicant/licence holder doesn’t exist between Assignments does not relieve the applicant/licence holder of its responsibility to provide the worker with 5.6 weeks paid holiday in a leave year
• The GLAA is providing new applicants and existing licence holders a period of amnesty until 5 April 2024 to review their processes, policies and systems to ensure they are compliant with the GLAA’s Licensing Standards

Aspire Comment

The Harpur Trust v Brazel concerned an employee engaged via a Contract of Employment who was employed for a full leave year.

The GLAA is applying this widening principle derived from the Supreme Court Judgement, to apply to workers engaged via Contracts for Services and Contracts of Employment.  It is standard process in the temporary labour arena that workers are paid on the principle of accruing holiday pay in relation to the time that they spend working via the 12.07% calculation but, in spite of this understanding previously being referenced in ACAS guidance, the Harpur v Brazel case has confirmed that such a calculation is contrary to the law. 

The GLAA is the first body to address the anomaly since July 2022 when the Supreme Court published its ruling in Harpur v Brazel. 

The GLAA’s brief acknowledges the consultation on calculating holiday entitlement for part-year and irregular hours workers.  Most affected by the issue have maintained their previous stance and live in hope that the consultation outcome will effect legislative change to make the 12.07% calculation (which is held to be logical and effective) legally correct.  Because of this, it seems strange that the GLAA are adopting this stance 15 months after the Supreme Court ruling and before the outcome of the consultation is published, which may well reverse their view (and allow the calculation for holiday accrual to be based on time worked).  

If you hold a GLAA Licence we suggest you query this with the GLAA, as otherwise, you risk losing your licence post the amnesty period for failing to abide by a critical licensing standard.