Q&As

When calculating the holiday pay of a worker whose pay varies from week to week, are weeks in respect of which the worker performs no work and receives sick pay or maternity pay, taken into account for the purposes of the 12-week reference period?

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Published on LexisPSL on 30/10/2019

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • When calculating the holiday pay of a worker whose pay varies from week to week, are weeks in respect of which the worker performs no work and receives sick pay or maternity pay, taken into account for the purposes of the 12-week reference period?

A worker is entitled to be paid in respect of any period of annual leave (and additional annual leave) at the rate of a week's pay in respect of each week of leave. The Working Time Regulations 1998, SI 1998/1833, reg 16 provides that sections 221 to 224 of the Employment Rights Act 1996 (ERA 1996) apply for the purposes of calculating a week's pay for each week of leave. The method of calculating a week's pay will, accordingly, depend on whether the employee works normal working hours or not. For further information, see Practice Note: Holiday pay—Calculating statutory holiday pay: general.

‘Normal working hours’ are not defined for the purposes of calculating holiday pay, but:

  1. an employee who receives overtime pay for working more than a fixed number of hours in a week (or other period) is still treated as having ‘normal working hours’ for the purposes of calculating statutory holiday pay

  2. for all other situations, the words ‘normal working hours’ should be given their natural meaning, ie the number of hours that a worker normally works in each week (or other period)

See Practice Note: Holiday pay—Calculating statutory holiday pay: normal working hours.

If the pay of a worker with normal working hours does not vary with the amount of work done, then:

  1. they are entitled to holiday pay at the amount which would be

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