Term-time contracts: what HR needs to know

Amazon has become the latest employer to offer term-time contracts. Leslie Martin discusses what they should include and who is entitled to request term-time-only working.

The past few years have seen an increase in the use of more flexible ways of working, due in part to the Covid-19 pandemic, but also the greater emphasis on employee mental health.

One such flexible working arrangement is the term-time-only contract (TTO). These are contracts that require staff to work term-time hours only. Ordinarily used within the education sector, these types of employment contracts have become more common among other employers who have recognised the need to change the way they work to attract and retain employees.

Amazon recently announced that it would allow all parents and grandparents working in its warehouses to work term-time only.

TTOs obviously do not suit everyone. Working during term-time only would clearly have an impact on an individual’s salary, and would be more beneficial to people who have children/grandchildren to care for.

These contracts can be hugely beneficial to many parents who would otherwise have to rely on wrap-around care from nurseries and schools or other forms of childcare during the school holidays. More importantly, TTOs are another option that parents can consider to ensure that the hours they work suit themselves and their families best.

What should a term-time contract include?

Like any other employment contract, TTOs need to include all the basic particulars of employment required under sections 1-3 of the Employment Rights Act 1996.

This will include the start day (for continuous employment purposes), job title, probation period details, place of work, information about whether the employee is required to work overseas, particulars of pay, benefits, working hours, training, holiday, sick provisions, notice, details of paid leave, and information about the grievance and disciplinary procedures.

Some of the clauses that will need particular consideration include:

• Pay: This will need to set out how the employee is paid, such as whether they will be paid a certain amount each month irrespective of whether they have worked that month (e.g. during the school holidays) or just for the hours worked that month (potentially zero during the summer holidays).
• Hours of work: This will need to specify the employee’s normal working days and hours and explain that they will not work during school holidays (or part of the school holidays). It should require the employee to notify the employer of the school term dates (which will vary from school to school) at the start of each academic year.
• Holiday provision: This clause will need to specify the amount of holiday to which the individual is entitled (which must be at least 5.6 weeks in accordance with Harpur Trust v. Brazel. As the statutory definition of a “week’s pay” is calculated using only the weeks the employee is actually working (rather than average pay throughout the year), this means that total annual holiday pay entitlement can be a much higher part of total annual income for TTO workers than it is for full-year workers based on the amount of time worked. It should also specify when holiday must be taken (e.g. during the school holidays). Note that given school holidays are longer than the statutory holiday entitlement, there will be periods of holiday that are unpaid.

Who can request term-time contracts?

As with any other type of flexible working request, any employee requesting the right to work only during term times will need to meet certain statutory criteria:

• they must be employees
• they must have 26 weeks’ continuous employment when they make their request
• they may only make one request in any 12-month period, and
• requests cannot be made by agency workers (except where they are returning to work from a period of parental leave).

Employers then have three months to consider the request and make a decision. If they reject the request, they must do so on grounds of one or more of the eight specified reasons:

• additional costs
• not being able to meet customer demand
• not being able to reorganise work among existing staff
• not being able to recruit additional staff
• negative impact on quality
• negative impact on performance
• insufficient work during the periods the employee proposes to work
• planned structural changes.

It is worth noting that the government has published a response to a flexible working consultation in which it confirmed proposals to make some changes to the statutory scheme, although it has not confirmed when these changes will come about. These include:

• removing the need for 26 weeks’ continuous employment
• requiring employers to consult with employees if they think they will reject the request
• allowing employees to make two flexible working requests in a 12-month period
• reducing the employer’s response period from three to two months, and
• removing the requirement for employees to explain how their employer might deal with the effects of their request.

Discrimination pitfalls

Employees under a TTO contract will likely fall under the definition of part-time workers for the purposes of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000. Employers therefore need to ensure that they do not treat employees on term-time contracts less favourably as a result of their part-time status without objective justification. Such a situation could easily arise if, for example, such employees were overlooked for promotion.

In addition, refusing a TTO request could expose an employer to an indirect sex discrimination claim if it could be shown that the decision had a disproportionate impact on one sex and could not be objectively justified.

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The prospect of more TTOs in the future, and more flexible working arrangements generally, is definitely a step in the right direction which should help improve staff retention and engagement. Employers will need to balance the interests of the employee making such a request against the need to maintain operations and ensure career progression for employees on such contracts.

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