Info zone – Paid holidays for short-term workers
Functions R Us organises parties for prestigious clients in and around Worthing, West Sussex. Husband and wife directors Des and Barbara manage and run the business for most of the year themselves, occasionally hiring additional catering and waiting staff on an ad-hoc basis for individual functions.
Over the busy Christmas and New Year periods, however, Des and Barbara need extra staff on a continuous basis. They usually hire Robert, who is a semi-retired chef, to work on a 10-week contract from 20 October. This year Robert is hired again and, as usual, he does an outstanding job. As the busy period of December approaches, Des and Barbara are relieved they have Robert around to help.
However, on 12 December Robert announces to Des and Barbara that he intends to take the last four days before Christmas Day as holiday. He also says that under European law he is entitled to be paid for the time he takes off.
Des and Barbara need to know if they can prevent Robert from "leaving them in the lurch", because there are no spare catering staff available for hire at this late stage and, without his help, they would have to cancel four lucrative contracts for Christmas functions. They also need to know if they have to pay for holiday for a temporary worker like Robert. *
Short-term staff are entitled to paid holidays
What the expert advises
Matthew Tom is an employment law specialist at Tarlo Lyons Solicitors
Although for the time being the 13-week qualification period will remain, employers in the hotel and catering sector should begin to review their seasonal staffing requirements and budget for having to pay for holiday for temporary staff.
In this particular scenario, if the new provisions were implemented as planned, Robert would be entitled to take four days' paid holiday under the accrual system. He has given the appropriate notice (ie, double the period of leave he anticipates taking) and by the time he takes the leave he will have sufficient service to entitle him to take four days' paid holiday.
But even under the working time regulations as currently drafted, employers are permitted to delay a worker's leave entitlement if there are good business reasons for doing so. Given the seasonal nature of the business, Functions R Us would be entitled to insist that Robert takes his holiday after the Christmas period, or that he accepts payment in lieu of paid holiday at the termination of his employment.
However, in order to insist on this, Des and Barbara would have to give Robert notice of their intention to delay the leave. The employer's notice period has to be at least the length of the holiday the worker intends to take - in this case, at least four days.
Possibly, Des and Barbara could engage Robert as an independent contractor, because the working time regulations do not apply to those who are genuinely self-employed. However, this would require very cumbersome procedures for what is essentially a fairly casual arrangement of convenience for all concerned.
It is also fairly likely that any employment tribunal (and indeed the Inland Revenue) would view this as a sham arrangement and would enforce the law (both on paid holiday and on tax) as if Robert were an employee.
What the law says
Currently, under the UK's working time regulations, Robert will not gain any right to paid holiday until he has completed 13 weeks' work. In previous years Robert would, therefore, have had no entitlement to paid holiday.
However, this has recently been challenged in the European Court of Justice, and the 13-week qualifying period has been declared unlawful. The judgment does not take effect immediately, but following this ruling the UK law must be changed and the 13-week qualifying period removed.
The Government has begun a month's consultation process, proposing an accrual system whereby an employee would become entitled to two days' paid leave after each month of work in the first year of employment. Incidentally, this produces a slight anomaly, in that it gives a total entitlement of 24 days' paid holiday in the first year, whereas on a normal five-day week, other workers get only 20 days. It remains to be seen if this will be addressed in the final regulations.
Assuming this scheme is introduced, anyone defined as a "worker" under the working time regulations will be entitled to accrue paid holiday from commencement of employment. "Worker" is a wider definition than "employee", and it includes anyone who is paid a regular salary or wage and works for an organisation.
Contacts
Tarlo Lyons
020 7405 2000
matthew.tom@tarlolyons.com
Employment Law and Industrial Relations Helpline
020 7396 5100
