Level of holiday pay

The main WTR regulations rely on sections 221 to 224 of the Employment Rights Act 1996 to determine a week’s pay for “each week of leave” (WTR 16). Regulation 13(6) of the WTR stating that any fraction of a day is to be treated as a whole day has been removed.

The basic principle is that a week’s pay is the pay due for the basic hours a worker is contracted to work. Pay for overtime hours is not included unless it is guaranteed overtime, required by the worker’s contract (Bamsey v Albion Engineering ([2004] IRLR 457)).

In calculating holiday pay, the EAT has held in Leisure Leagues v Maconnachie EAT/940/01 [2002] IRLR 600, that the amount of a day’s holiday pay should be found by dividing the annual salary by the number of days actually worked (in that case, 233) rather than by 365, which was the previous practice. This was to take into account good industrial practice and the introduction of the WTR. This was confirmed by the EAT in the case of Yarrow v Edwards Chartered Accountants UKEAT/0116/07.