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How the 2022 Supreme Court
judgement on holiday entitlement
impacts care providers
AWARD WINNING ALL-IN-ONE HOME CARE
MANAGEMENT SOFTWARE
2
• CareLineLive is an award-winning, all-
in-one management software for home
care providers.
Who we are
• Our mantra is “better systems mean
better care”.
• It improves efficiency, capacity and
compliance.
3
• The July 2022 Supreme Court
judgement on leave
entitlement and pay requires
home care providers to
evaluate their holiday
entitlement policies
Holiday entitlement
4
• Situation before UK Supreme Court
(UKSC) judgment
Outline
• UKSC case
• What it means for zero-hours
contract workers
• Examples
5
• I’m just a software developer
Disclaimer
• No contracted entitlement
6
• Accrual System (12.07%)
Previous situation
• Percentage Method
• Calendar Week Method
7
The Supreme Court’s case
• Music teacher, part-year worker
• Average weekly pay
• 28 days entitlement
• The school used the Percentage
Method
8
Implications for carers
• Carers are are entitled to 28 days
• Leave to be taken in days (or half-
days)
• Pay must be calculated using the
Calendar Week Method
9
• Part-time
Special cases
• Starting mid-(leave) year
• Leaving mid-(leave) year
10
• Leave year from Jan 1st to Dec 31st
Examples
• Statutory entitlement of 28 days
• Entitlement rounded up
11
Example 1 – Fixed term contract
Contracted from March 17th , 2022 to July 31st, 2022.
They are employed for 137 days.
Their entitlement for 2022 is 28 * 137 / 365 = 10.509 days, rounded up to 11 days.
Contracted from March 17th , 2020 to July 31st, 2020.
They are employed for 137 days.
Their entitlement for 2020 is 28 * 137 / 366 = 10.480 days, rounded up to 10.5 days.
12
Example 2 – Fixed term contract, spanning two leave year
Contracted from November 17th , 2020 to January 31st, 2021.
Although it’s a fixed-term contract, in 2020 they are employed until the end of the leave year, for 2
months.
In 2021 they are employed for 31 days.
Therefore their entitlement for 2020 is 28 * 2 / 12 = 4.666 days, rounded up to 5 days.
Therefore their entitlement for 2021 is 28 * 31 / 365 = 2.378 days, rounded up to 2.5 days.
13
Example 3 – Part-time
Contracted from March 17th , 2022 to work 3 hours a day, 5 days a week
Their FTE is 0.375, assuming a 40 hours a week for a full-time.
Their entitlement is 28 * 0.375 = 10.5 days,
In 2022 they are employed for 10 months, therefore their entitlement for 2022 is (28 * 0.375) * 10 /
12 = 8.75 days, rounded up to 9 days
Contracted from March 17th , 2022 to work 8 hours a day, Monday and Tuesday
Their FTE is 0.4, assuming a 40 hours a week for a full-time.
Their entitlement is 28 * 0.4 = 11.2 days, rounded up to 11.5 days
In 2022 they are employed for 10 months, therefore their entitlement for 2022 is (28 * 0.4) * 10 /
12 = 9.333 days, rounded up to 9.5 days
14
Example 4a – Zero-hours contract (entitlement)
Contracted from March 17th , 2020, at a £12.00 hourly rate.
In 2020 they are employed for 10 months, therefore their entitlement for 2020 is 28 * 10 / 12 =
23.333 days, rounded up to 23.5 days. From 2021 their entitlement is 28 days.
15
Example 4b – Zero-hours contract (pay)
In March, April and May they have worked only one hour every Monday.
Their pay for the 2 weeks is therefore £12.00 * 2 = £24.00.
On June 1st 2020 they take two weeks, i.e. 14 days, of paid annual leave.
Their weekly average pay is £12.00.
16
Example 4c – Zero-hours contract (pay)
From June to November, they also worked one hour every Wednesday.
Their weekly average pay is (£12.00 * 10 + £12.00 * 2 + £24.00 * 24) / (10 + 2 +24) = £20.00.
As the leave is not in weeks, we need to use the daily average pay, therefore the pay for the leave
is (£20.00 / 7) * 7.5 = £21.43 (rounded up)
On December 1st 2020 they take the rest of their paid annual leave, 7.5 days
During the first three months they were paid £12.00 a week for 10 weeks.
They then had 2 weeks holiday, at £12.00 a week.
Finally, until December they were paid £24.00 a week for 24 weeks
Thank you for listening
Carelinelive.com
Any questions?

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How the 2022 Supreme Court judgement on holiday entitlement impacts care providers

  • 1. How the 2022 Supreme Court judgement on holiday entitlement impacts care providers AWARD WINNING ALL-IN-ONE HOME CARE MANAGEMENT SOFTWARE
  • 2. 2 • CareLineLive is an award-winning, all- in-one management software for home care providers. Who we are • Our mantra is “better systems mean better care”. • It improves efficiency, capacity and compliance.
  • 3. 3 • The July 2022 Supreme Court judgement on leave entitlement and pay requires home care providers to evaluate their holiday entitlement policies Holiday entitlement
  • 4. 4 • Situation before UK Supreme Court (UKSC) judgment Outline • UKSC case • What it means for zero-hours contract workers • Examples
  • 5. 5 • I’m just a software developer Disclaimer • No contracted entitlement
  • 6. 6 • Accrual System (12.07%) Previous situation • Percentage Method • Calendar Week Method
  • 7. 7 The Supreme Court’s case • Music teacher, part-year worker • Average weekly pay • 28 days entitlement • The school used the Percentage Method
  • 8. 8 Implications for carers • Carers are are entitled to 28 days • Leave to be taken in days (or half- days) • Pay must be calculated using the Calendar Week Method
  • 9. 9 • Part-time Special cases • Starting mid-(leave) year • Leaving mid-(leave) year
  • 10. 10 • Leave year from Jan 1st to Dec 31st Examples • Statutory entitlement of 28 days • Entitlement rounded up
  • 11. 11 Example 1 – Fixed term contract Contracted from March 17th , 2022 to July 31st, 2022. They are employed for 137 days. Their entitlement for 2022 is 28 * 137 / 365 = 10.509 days, rounded up to 11 days. Contracted from March 17th , 2020 to July 31st, 2020. They are employed for 137 days. Their entitlement for 2020 is 28 * 137 / 366 = 10.480 days, rounded up to 10.5 days.
  • 12. 12 Example 2 – Fixed term contract, spanning two leave year Contracted from November 17th , 2020 to January 31st, 2021. Although it’s a fixed-term contract, in 2020 they are employed until the end of the leave year, for 2 months. In 2021 they are employed for 31 days. Therefore their entitlement for 2020 is 28 * 2 / 12 = 4.666 days, rounded up to 5 days. Therefore their entitlement for 2021 is 28 * 31 / 365 = 2.378 days, rounded up to 2.5 days.
  • 13. 13 Example 3 – Part-time Contracted from March 17th , 2022 to work 3 hours a day, 5 days a week Their FTE is 0.375, assuming a 40 hours a week for a full-time. Their entitlement is 28 * 0.375 = 10.5 days, In 2022 they are employed for 10 months, therefore their entitlement for 2022 is (28 * 0.375) * 10 / 12 = 8.75 days, rounded up to 9 days Contracted from March 17th , 2022 to work 8 hours a day, Monday and Tuesday Their FTE is 0.4, assuming a 40 hours a week for a full-time. Their entitlement is 28 * 0.4 = 11.2 days, rounded up to 11.5 days In 2022 they are employed for 10 months, therefore their entitlement for 2022 is (28 * 0.4) * 10 / 12 = 9.333 days, rounded up to 9.5 days
  • 14. 14 Example 4a – Zero-hours contract (entitlement) Contracted from March 17th , 2020, at a £12.00 hourly rate. In 2020 they are employed for 10 months, therefore their entitlement for 2020 is 28 * 10 / 12 = 23.333 days, rounded up to 23.5 days. From 2021 their entitlement is 28 days.
  • 15. 15 Example 4b – Zero-hours contract (pay) In March, April and May they have worked only one hour every Monday. Their pay for the 2 weeks is therefore £12.00 * 2 = £24.00. On June 1st 2020 they take two weeks, i.e. 14 days, of paid annual leave. Their weekly average pay is £12.00.
  • 16. 16 Example 4c – Zero-hours contract (pay) From June to November, they also worked one hour every Wednesday. Their weekly average pay is (£12.00 * 10 + £12.00 * 2 + £24.00 * 24) / (10 + 2 +24) = £20.00. As the leave is not in weeks, we need to use the daily average pay, therefore the pay for the leave is (£20.00 / 7) * 7.5 = £21.43 (rounded up) On December 1st 2020 they take the rest of their paid annual leave, 7.5 days During the first three months they were paid £12.00 a week for 10 weeks. They then had 2 weeks holiday, at £12.00 a week. Finally, until December they were paid £24.00 a week for 24 weeks
  • 17. Thank you for listening Carelinelive.com Any questions?

Editor's Notes

  1. [click] CareLineLive is an award-winning, all-in-one management software for home care providers. [click] It improves efficiency, capacity and compliance. [click] Our mantra is “better systems mean better care”.
  2. One of the features of our software is the automation of payroll, and the recent Supreme Court judgement has meant that we have had to fully research and understand the implications of the judgement in order that our software can reliably calculate what carers are entitled to. The main outcome from the judgment was that all employees in the UK are entitled to the minimum 28 days of paid annual leave. Only part-time employees have the entitlement pro-rated. But the judgment has implications on pay as well. Firstly, because the number of paid annual leave for some employee may increase. But also, because some employers were not calculating the pay correctly, especially for zero-hours contract workers.
  3. In this webinar we are going to briefly talk about the [click] “current” situation with regards to leave entitlement and pay, [click] we will outline the case that was brought up to the UKSC, [click] what are the implications of the court’s judgments for zero-hours contract employees, and finally [click] we will have some examples which will hopefully clarify things.
  4. Before we start, I better make clear a couple of things. [click] I am a software developer, good one perhaps, but still a software developer. I’m not a lawyer and I don’t have experience in employment laws and regulations. All I am going to tell you today comes from some research I have done, reading blog posts about the court case, sections on the gov.co.uk website, and sometimes the Working Time Regulations and even a little bit of the actual judgments from the Supreme Court’s website. But again, I’m just a software developer, so you may want to seek professional advice. [click] Also, we are going to talk about the statutory entitlement. If an employee has a contracted entitlement, that is their contract specifically sets out a leave entitlement, that takes precedence, although it cannot be less that the statutory entitlement. And as a reminder, the statutory entitlement is 28 days, 20 days from the EU WTD (now incorporated into UK law), and 8 days of public holidays from the WTR. Employers may require their employees to take public holidays as annual leave, but it’s not mandatory.
  5. So, let’s now talk about how leave entitlement and leave pay were generally calculated before the Supreme Court judgment. Remember, we are talking about irregular hours workers, with a statutory leave entitlement. [click] It was generally accepted, as recommended by Acas I believe, that these workers would accrue leave depending on the number of hours worked. Specifically, they would accrue 12.07% hours of leave for every hour worked. This percentage comes from 52 weeks in a year, or 260 weekdays. If we take out the number of days of leave, we get 232 working days, and 28 is 12.07% of 232. This is how leave entitlement was generally calculated. But what about pay? We basically had two ways. The first one is the so-called [click] Percentage Method. This is very simple. The entitlement was calculated by accruing 12.07% of hours worked and the pay for every hour of leave was simply the hourly rate. The second method is the [click] Calendar Week Method. With this method an average weekly pay is calculated. The WTR describes how to calculate the average weekly pay, which is using a reference period of 12 weeks, amended to 52 weeks from 6 April 2020. This is why this method is also sometimes called the 52-weeks method. It’s useful to remember that only weeks in which remuneration has been received are to be included in the reference period. Statutory payments, like for example sick-pay or maternity leave, do not constitute remuneration, but leave pay does! https://www.gov.uk/government/publications/calculating-holiday-pay-for-workers-without-fixed-hours-or-pay/calculating-holiday-pay-for-workers-without-fixed-hours-or-pay--2#statutory-payments
  6. The case brought to the Supreme Court was about a [click] music teacher. She was employed by the school on a continuous contract, i.e. she was in employment for the full leave year, but worked only on school terms. She would take her leave during school breaks, and the school used to pay her for 28 days of leave, using the 52-weeks method. They then changed it and [click] started using the Percentage Method, i.e. paying her only accrued hours at her hourly rate. She sued them and the case eventually reached the Supreme Court. They affirmed, or maybe I should say re-affirmed, that all workers are entitled to [click] 28 days of paid annual leave, irrespectively of the number of hours they worked. The only “exception” is for part-time employees, as we will see later. In doing so they also practically rejected the Percentage Method, saying that 12.07% has no place with regards to leave. The only way to calculate the leave pay is with the [click] Calendar Weeks Method.
  7. I assume your carers are all employed on a continuous zero-hours contract, so what are the implications of this judgment for you? Let’s see. [click] They are entitled to the full statutory entitlement of 28 days of paid leave per leave year. This is because although they may not work every day, or every week, or even every month, they are still employed for the whole of the leave year. So, no more accrual. Since they don’t accrue hours any longer, [click] leave is taken in days or half-day. I admit, this does not come directly from the Supreme Court, but it makes sense as a consequence of not accruing leave. [click] Pay must be calculated using the Calendar Weeks Method. Once we know the average weekly pay, we can easily calculate the average daily pay. This is the reason why the week was chosen as reference, because it’s always the same length, 7 days, as opposed to a month, which is never quite the same number of days or weeks.
  8. I’d like to talk about some special cases now, that are worth mentioning. As I said earlier, [click] part-time employees are treated slightly differently. In very simple terms, a part-time employee is one that still works regular hours, that is the same number of hours a week or maybe fortnight, but not the same amount as a full-time employee. Their entitlement is pro-rated depending on their Full Time Equivalent coefficient. Another special case is an employee [click] starting in the middle of a leave year, which is, let’s face it, practically always. How many times has someone started a new job on the first day of the leave year? In this case the legislation says that they are entitled to a proportion of their entitlement, depending on how many months of employment fall within the leave year. It will be clearer later with some examples. Also, employees [click] leaving in the middle of a leaver year, are only entitled to a proportion of their entitlement. But this time it depends on the number of days, and not months, of employment. The difference in treatment comes from the fact the employers can, if they choose to, award one twelfth of the employee’s entitlement every month in the first year of employment. A final note about someone starting and leaving in the same leave year. They are again entitled to only a proportion of their entitlement, and, as for employees leaving in the middle of a leave year, it depends on the number of days of employment. I want to make clear that these special cases are all about the entitlement, and not pay. That is still to be calculated with Calendar Week Method, apart from part-time. Part-time employees are most likely still paid a monthly salary and that salary includes the leave pay, and therefore, no calculation is necessary.
  9. As I promised we are now going to look at a few examples, which will hopefully clarify things and there won’t be any need for any questions at the end. [fingers crosses] Before we start though, I want to make some assumptions: [click] The leave year is from January 1st to December 31st [click] All examples use the statutory entitlement of 28 days. [click] Finally, all calculations are done with all decimal places, However, at the end, the entitlement is rounder up to the nearest day or half-day. This is in accordance with the gov.co.uk guidance.
  10. [click] Fixed-term contract completely in the leave year [click] In the leave year they are employed for 137 days [click] Their entitlement is therefore 11 day. [click] This is similar to the one above but in 2020. Why does it matter? Because 2020 was a leap year, and therefore, although [click] they were still employed for 137 days, [click] their entitlement is not 10.5 days
  11. [click] This is still a fixed-term contract, but it spans two leave years [click] In 2020 they were employed for two months. And this is what we need to use to calculate the entitlement for the first year [click] which is therefore 5 days [click] For 2021 we go back to days [click] and their entitlement is 2.5 days
  12. We are now going to look at some examples for zero-hours contract workers. [click] Our worker starts on March 17th, 2020 and their hourly rate is £12.00 [click] We have already seen a few example about the entitlement so it should be clear that in 2020 their entitlement is 23.5 days and then it will be 28 days. This is a direct consequence of the Supreme Court judgment.
  13. We now move onto some examples of how much to pay them for their leave. [click] They start working only one hour every Monday. [click[ Then in June they take two weeks of paid annual leave. [click[ We don’t have 52 weeks of pay to use, and in this case the legislation allows us to use what we have. [click] So, the pay for the whole 2 weeks of paid annual leave is £24.00
  14. Now things get a bit more complicated, [click] as they start working one hour on Monday AND Wednesday. [click] In December they take the rest of they holiday, which is 23.5 – 14, 7.5 days We now need to calculate the weekly average pay. [click] They were paid £12.00 a week for the first 10 weeks [click] Then they went on leave, and we need to consider those too, so another 2 weeks on £12.00 a week. [click] Then they were paid £24.00 a week for the following 24 weeks. Again, we don’t have 52 weeks, so we will have to use the 36 weeks we have [click] and the weekly average pay is £20.00 The reason the average weekly pay is used, rather than monthly or hourly, is because the week is always the same length, i.e. 7 days. [click] which is how we are going to calculate the pay now.
  15. This takes us to the end of this presentation. [click] Just a reminder you can download it on SlideShare [click] I will now take some questions.