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Nil hours holiday pay??
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Could somebody please explain to me how holiday pay is worked out if your on a Nil hours contract.
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(2-part post):
There is no 'standard' method of doing the calculation. A common way, though, is as follows. (Note that the actual figures will vary depending upon how many hours per week 'normal' employees work and how many paid weeks holiday they receive):
Let's assume that that an employer has employees working on 'normal' contracts who work for 40 hours per week (over 5 days) and who receive the minimum 4 weeks (i.e. 20 days) paid holiday per year. (Even if all staff are actually on 'nil hours' contracts, these 'notional' employees can still be used to provide a reference point).
That means that each of these 'normal' employees attends for work for 48 weeks each year. So the total number of hours worked, each year, is 48 x 40 = 1920. In return for working these hours, the employee receives 20 days paid holiday so, averaging it out (20 divided by 1920), each hour worked gains the employee an entitlement of one ninetysixth of a days holiday. To put it another way, the employee has to work for a total of 96 hours to accrue one day of paid holiday.
This formula can then be carried forward to the staff who are on 'nil hours' contracts. i.e. a full day of paid holiday entitlement is awarded for every 96 hours worked.
There is no 'standard' method of doing the calculation. A common way, though, is as follows. (Note that the actual figures will vary depending upon how many hours per week 'normal' employees work and how many paid weeks holiday they receive):
Let's assume that that an employer has employees working on 'normal' contracts who work for 40 hours per week (over 5 days) and who receive the minimum 4 weeks (i.e. 20 days) paid holiday per year. (Even if all staff are actually on 'nil hours' contracts, these 'notional' employees can still be used to provide a reference point).
That means that each of these 'normal' employees attends for work for 48 weeks each year. So the total number of hours worked, each year, is 48 x 40 = 1920. In return for working these hours, the employee receives 20 days paid holiday so, averaging it out (20 divided by 1920), each hour worked gains the employee an entitlement of one ninetysixth of a days holiday. To put it another way, the employee has to work for a total of 96 hours to accrue one day of paid holiday.
This formula can then be carried forward to the staff who are on 'nil hours' contracts. i.e. a full day of paid holiday entitlement is awarded for every 96 hours worked.
The method of calculation, which I've described, (or something similar to it) is used by 'responsible' employers (such as health authorities) who employ staff on 'nil hours' contracts. It must be noted, however, that some (possibly most) people who are employed on 'nil hours' contracts are not legally 'employees' of the companies with whom they have such contracts. In such cases, people with 'nil hours' contracts do not have the same rights which 'normal' employees have. In particular, it's possible that a person with a 'nil hours' contract may have no entitlement to any paid holidays. (A test case was brought before the courts in 1998. The Court of Appeal ruled that the people involved in the case, who were on 'nil hours' contracts were employees of the company with whom they had such contracts and therefore entitled to the same treatment as other employees. However, in 1999, the matter was referred to the House of Lords where it was decided that the people on 'nil hours' contracts were NOT employees and therefore had no rights to the statutory entitlements of employees. Reference: http://www.swarb.co.uk/lawb/empNilHours.shtml) .
To summarise: If you're on a 'nil hours' contract, you may have no right any holiday entitlement at all. If, however, your contract is with a 'responsible' employer, it's likely that your holiday entitlement will be calculated by working out how much holiday entitlement other staff accrue for each hour worked and awarding you a similar entitlement.
Chris
To summarise: If you're on a 'nil hours' contract, you may have no right any holiday entitlement at all. If, however, your contract is with a 'responsible' employer, it's likely that your holiday entitlement will be calculated by working out how much holiday entitlement other staff accrue for each hour worked and awarding you a similar entitlement.
Chris
Footnote:
The link I tried to give above, to the details of that test case, isn't particularly important but I see that it won't work anyway because the bracket at the end of my sentence has got tied up with the link. For completeness, the link should be:
http://www.swarb.co.uk/lawb/empNilHours.shtml
Chris
The link I tried to give above, to the details of that test case, isn't particularly important but I see that it won't work anyway because the bracket at the end of my sentence has got tied up with the link. For completeness, the link should be:
http://www.swarb.co.uk/lawb/empNilHours.shtml
Chris
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