Holiday entitlement question

[PinkPanther50]

Hi my daughter has a 6 hour (1 day a week) contract which gives her 5.6 days holiday a year. She has been regularly working overtime for the last nine months and is doing about 35/40 hours a week. When she enquired this week about how much holiday she had accrued she was told she is only allowed the 5.6 days. Even though she has a contract I’m fairly certain that holiday pay accrues from the hours she has worked as part time employees are not allowed to be treated differently. She works for a chain of shops (about 20 branches in the UK) that are owned by larger parent company so we are second guessing whether we are right in thinking that she’s entitled to more holiday because surely the big bosses can’t be wrong! Any help gratefully received.

Is the extra pay put through as hours at standard rate or overtime with holiday pay included?

Thanks for replying. It’s the standard rate. It just says overtime, rate - which is her normal hourly rate

Speak to Acas, but I'm fairly sure she's entitled to 12.07% of whatever she has actually worked.

I believe that your daughter will only be entitled to the 5.6 days as this is allocated in line with the contracted hours. If your daughter wants to take a weeks annual leave, they will book the 1 day annual leave for the day they work and the rest they would refuse over time (unpaid) this is how a lot of shops operate as far as I know.

I have zero hours contract with NHS trust (mostly retired but do the odd shift when they are desperate). The payslips always show an extra amount of money labelled WTD(working time directive) on top of the hours worked pay. This is basically annual leave that you are entitled to for the hours worked. I'm pretty sure that it is a legal requirement as otherwise they wouldn't pay it🤔

If it is contractual overtime, ie her contract states that she will be required to do extra hours on a regular basis, then she is entitles to accrue holiday pay on the extra hours as they are part of her contract of employment.
If it is just temporary overtime and not guaranteed in any way at all, then it's just overtime and what your daughter has been told is correct.

Yes we have read that about zero hours contract and it seems fair. The problem here is she has a 6 hour contract, at this point she would be much better off on a zero hours contract

This just seems very unfair doesn’t it. She would be better off on a zero hours contract

I believe the holiday entitlement is based on your contracted hours and doesn’t include voluntary overtime.

It’s not contractual. They are incredibly short staffed so her and a couple of others are covering the absence. It’s very unfair that they are being penalised because they are being helpful. I kind of understand now why the company is not too fussed about replacing the staff that have left as it’s cheaper for them!

It’s a bit of a grey area. Yes, regular overtime should accrue holiday pay, but the definition of regular isn’t clear as an employer.

Why can’t she increase her contracted hours? That might explain if it’s considered regular or not, ie if it’s because she won’t be needed over summer, it’s not consistent

She’s happy to work full time, or nearly full time but they won’t give her a new contract. She is needed to do the hours as there just aren’t enough staff to cover and she’s been consistently working at least 30 hours a week for 9 months. It’s an incredibly underhand way of employing staff. She is going to leave as soon as she can.

Thank you for the replies. I’m so angry on her behalf that she isn’t being remunerated fairly. I had no idea that she wouldn’t accrue holiday otherwise I would have encouraged her to find another job months ago. She is currently applying for for other jobs. It’s a joke that her employer has the image of being ethical and fair and a great place to work!

Okay, so this may be slightly different. It is worth calling Acas and checking, as it is a grey area. Holiday pay should be calculated to include any regular overtime and, if you are saying she has to work it and has no choice, then there's a strong possibility it should be included.
Therefore, technically she is only entitled to 5.6 days or 5.6 weeks at one day per week, but the value of that one day's pay should be calculated to include the regular overtime. I think they only have to do this for four weeks per year, though. The problem will be proving that the overtime can be deemed as regular, though. I hope this makes sense.

Thank you, yes I understand what you are saying. It’s not enforced overtime but it’s a fairly small store and to ensure it’s properly staffed she has picked up the extra hours as she needs the money! I think after 9 months worth of her doing extra hours it should be considered ‘regular’. She did speak with ACAS but they didn’t really give her clear advice, just told her to ask for it and if she didn’t get anywhere then to call them again!

This is how it worked when I worked in retail about 14 years ago. It worked for me as f I didn't want to work the 'overtime' I just said no. It sometimes left them short staffed but that was their problem!

@PinkPanther50 I may get shouted down.

When someone works less than full time the hours up to full time are not overtime but additional hours. The exception to this is if a business normally operates Monday to Friday and offers Saturday overtime.

The difference is that additional hours are not paid at overtime rate instead they are paid at the same rate as full time staff. They are pensionable and I believe attract holiday pay. The rationale is if you have two employees one contracted to work full time 37.5 hours and one contracted to 6 hours but works 37.5 hours. If they both work 37.5 hours a week for 12 weeks they should both accrue the same leave entitlement.

Overtime is a separate issue.

I would advise your daughter to create a spreadsheet showing the hours worked each week over the last 12 months. Check her pay slips to see how the extra hours are paid e.g. does is say - overtime, additional hours, plain time etc? She then needs to either check the pay policy or write to HR and confirm what the pay rate is and what it includes. At this stage don’t mention annual leave, definitely check its pensionable pay.

Then talk to ACAS, make sure you are clear if it is paid as overtime or additional hours etc. using the correct terminology is key.

This guidance may help Section 2.6
https://assets.publishing.service.gov.uk/media/5f1563823a6f405c096c34f7/calculating-holiday-pay-for-worker-without-fixed-hours-or-pay.pdf

@Harassedevictee thank you for replying. I will get her to look at her payslip I know it says overtime and rate ( which is her normal hourly pay) but I’m not sure about the pension. It’s so complicated !

ACAS suggests that this is based on regular overtime and calculated based on previous year. If your daughter only just started taking lots of overtime and it’s only been the last month or so, it might not be applicable but worth looking at those payslips as PP suggested

Holiday pay must include overtime payments if an employee has regularly received overtime pay during the previous year.
Any relevant overtime pay must be included in:

• at least 4 weeks of the holiday pay – for most employees
• 5.6 weeks of holiday pay – for irregular hours workers and part-year workers

Incorrect

What she wants to find is a policy that says something like additional hours up to full time attractiveness plaintime rate not overtime.

You’ve interpreted this wrong. This is about calculating the rate at which to pay holiday pay, not to calculate entitlement to holiday.

UPDATE
She went to her managers manager and they have looked at it and realised it’s a problem and she has been given her holiday hours 🙌 as have the other staff members in her store! Thanks for all the advice above

Brilliant update. So pleased for your daughter.

I hope the other staff who have also got their entitlement thank her.