Background and summary
Further to the legislative changes on holiday pay, and as set out in previous updates to HR colleagues, the processes for paying some casual workers is changing. This briefing note sets out the changes. The holiday webpages and PXD and Payroll guidance have been revised to reflect these changes.
Rolled-up holiday pay
Rolled-up holiday pay has been reintroduced as a legally compliant pay mechanism for irregular hours and part-year workers. ‘Rolled-up’ holiday pay means adding an additional amount for holiday pay every time you make a salary payment, instead of staff accruing holiday and then being paid for it when they book and take it. (Note that employers still need to ensure that staff take sufficient leave during the course of a holiday year – ie you could not pay someone rolled-up holiday pay and then employ them to work the whole year without at least a minimum of 28 days leave).
Rolled-up pay must be:
- paid at the same time as the worker is paid for the work done in that pay period, and
- calculated at a rate of at least 12.07% of the worker's total pay in a 'pay period'. 12.07% is equivalent to the statutory minimum of 28 days leave per year and a pay period is how often someone gets paid, which for workers at Oxford is typically monthly, and
- shown as a separate pay element on the worker's payslip
New arrangements for casual teachers, casual student ambassadors and casual examiners
As rolled-up pay can only be used for irregular hours and part-year workers (see Building up holiday - Irregular hours and part-year workers - Acas for definitions) after careful consideration and consultation it has been decided that rolled-up pay will be used for:
- Casual teachers
- Casual student ambassadors
Rolled-up pay is also now used for casual examiners but these appointments are paid through a separate mechanism and separate arrangements are in place.
Rolled-up pay is not available for:
- standard casual workers as they are not all irregular or part-year
- any other type of appointment except as described above.
New mechanism to calculate and pay rolled-up pay
In order to ensure that rolled-up pay is calculated and paid consistently, all casual teaching and student ambassador appointments must have a new allowance added:
“4233 - ~CAS HOLIDAY PAY ROLLED UP”
Having done this, departments simply need to submit claims for hours worked (whether via the timesheet or through PXD). Rolled-up holiday pay is applied automatically to all qualifying payments made against appointments to which the allowance has been added.
Please see Create a new casual appointment | HR Systems (ox.ac.uk) for details.
The Casual rolled-up holiday pay allowance cannot be used against any other type of appointment.
As holiday payment is being made in advance, casual teachers and student ambassadors may book periods when they are on leave and unavailable for work, but this cannot be booked as paid holiday, and no ‘pay in lieu of accrued untaken holiday’ can be calculated at the end of the appointment as holiday pay is made against each hour worked.
Any requests made for holiday pay (including pay in lieu of accrued, untaken holiday) for casual teachers and student ambassadors will be returned to departments by the Payroll team.
Holiday pay for casual workers and variable hours employees
For all other staff types including casual workers (standard 12 weeks max casual appointments) and variable hours employees, pay for holiday can only be made when holiday is booked and taken, or paid in lieu when employment is terminating. Where departments were previously using rolled-up pay for these groups this was not compliant with the published process, and must not be continued.
Holiday accrual should be recorded, as worked, in a leave record. When the casual worker or variable hours employee wishes to book leave, they do so from their accrued balance and holiday pay is requested at the time they take the leave.
Holiday must be taken within the holiday year in which is accrued.
Holiday pay for term-time only employees
The arrangements for term-time only employees are unchanged. Holiday is calculated on the basis of a minimum of 17.1% of contracted hours (a higher percentage applies if long-service leave entitlement applies), and an appropriate period is allocated at the end of each term which is paid as holiday. No paid holiday can be taken within the term-time period: any leave that is needed must be taken as unpaid, unless the hours can be made up.
Letter of engagement templates
New casual letter of engagement templates were issued in June 2024, and should be used for all casual workers engaged after this date. They include the appropriate contractual wording allowing for rolled-up pay in the relevant staff groups. If the new template has not been used then rolled-up pay is not allowable.
Setting up posts in PXD
Each casual appointments must be set up in accordance with the guidance at Create a new casual appointment | HR Systems (ox.ac.uk)
Casual teaching and student ambassador appointments which commenced before June 2024
For any casual teaching or student ambassador appointments made on old contractual terms, rolled-up pay is not available and holiday should be accrued, booked within the appointment or may be paid in lieu at the end of the appointment as long as this is less than 12 months in total duration.
Payment in lieu of holiday
Payment in lieu for accrued, untaken holiday is only available when employment is terminating. This is in line with the principle of the Working Time Regulations. In all other circumstances accrued holiday must be taken. Up to 5 days may be carried over from one holiday year to the next as long as it is taken within 3 months of the start of the new holiday year. The only exception is where it has been impossible to take holiday due to family leave, or sick leave. Where an employee is transferring between university departments holiday cannot be paid in lieu - See holiday entitlement for further details.
