Thu 23 Feb 2023

Term time worker entitled to national minimum wage for unworked hours

Hot on the heels of last year's Supreme Court judgment on calculating holiday pay for part year workers, this new judgment serves to highlight how complex dealing with entitlements for part year workers can be.

In Lloyd v Elmhurst School Limited the claimant worked as a part-time learning support assistant.  She was paid a salary in equal monthly instalments.  She worked 21 hours over three days each week during term time and was, according to her contract, "entitled to the usual school holidays as holidays with pay".  She worked for 21 hours (3 days) per week over 40 weeks comprising (1) the total of the 36 weeks she worked in term time and (2) the 4 weeks paid leave she was due under the Working Time Regulations 1998.

The claimant brought a claim for unlawful deduction of wages on the basis that her "basic hours" - the hours she was entitled to be paid national minimum wage for - fell to be calculated over 52 weeks of the year given the terms of her contract of employment.  If that was correct, then she would not have been paid national minimum wage for her basic hours.  Her claim was unsuccessful before an employment tribunal, who were of the view that her basic hours had been calculated correctly over 40 weeks of the year.  However, the Employment Appeal Tribunal ("EAT") disagreed.  It held that the basic hours were to be ascertained from the terms of her contract of employment alone, and not from the hours she actually worked.  That could include hours where she was contractually entitled to receive normal wages during a period of absence such as contractual holiday. 

This case is an example of where statutory rights and contractual rights combine.  The claimant is, of course, entitled to national minimum wage for the hours she actually works, and she is entitled to a minimum period of paid holiday.  However, her contract enhanced this entitlement by specifying she was entitled to "the usual school holidays as holidays with pay". The contract did not state her hours of work or salary or even that she was engaged on a term-time only contract. 

The UK Government recently launched a consultation on calculating holiday entitlement for part-year and irregular hours workers in light of the last year's Supreme Court judgment on that issue.  However this case was at its root a contractual matter and could have been avoided with alternative drafting.  The contract could have stipulated that the claimant's basic hours did not include school holidays, other than in respect of their statutory entitlement to paid holiday.  Both cases though highlight the complexities that can arise when dealing with part year workers. 

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