Putting The Joy Back In Holidays

By Jennifer Marsden-Lambert

One of the questions we often get asked is about how to calculate holidays (also known as PTO or simply 'leave' if you are not from the UK). And, to be honest, we sometimes find ourselves scratching our heads a little bit too…

Let’s take for example someone who starts part way through the year, and then changes hours again later in the year, where we end up doing two pro rata calculations and sticking them together.

Or someone who works different hours on different days, where we need to use an hours-based calculation, or take an average of their working day, providing payroll can manage this method. That's before you get into workarounds needed for some timesheet systems.

We always have someone in our team do a second check on our own holiday calculations – even though it’s our job to understand how these work. Plus, it seems we are not the only ones to struggle with this.

What’s more, different countries have various methods for calculating leave. For example, our near neighbours in Ireland have a different method to us in the UK for calculating public holiday entitlement for part-time employees.

The UK system for holiday calculations is based on the Working Time Directive, a piece of European Legislation that was adopted into law in the UK through the Working Time Regulations.

A recent Supreme Court ruling has thrown up an additional problem for employers up and down the land, based on a quirk that was written into this UK legislation (probably unintentionally!).

Everyone had assumed that the holidays for those on variable hours across a year would be calculated on a pro rata basis in much the same way as we do for part time employees. However, we have now learned this is not the case. Even gov.uk had been promoting the wrong method for years.

Following the ruling, a new method has been announced that means excluding any weeks in which an employee worked no hours from the calculation.

To help with this perennial problem, and try to put the joy back into holidays, we have produced a helpful guide which details the standard steps used in the UK to calculate leave for part-time employees. We’ve also included an additional section to account for the new method of calculating leave for employees who don’t work every week. To obtain a copy of this document, please get in touch here.

About Jen Marsden-Lambert

Jen is the Founder and Director of Second Chapter, and is a Level 7 CIPD-qualified HR generalist with over 10 years' experience in HR leadership roles. She works with clients to improve employee and organisational success through an insight-led, multi-disciplinary approach. She also holds volunteer roles in mental health, community support, environmental conservation, and ending violence against women. She lives in Sheffield with her husband and two cats.