Holiday pay & NI - casual employment

My client has been working on a casual basis for a big employer for most of this year, working in principle for 2 days a week.  Average hours each week are around 17.  He pays tax at BR (he has other taxable income elsewhere) and NI at 11% above the £110 threshold.  He has accrued a great deal of holiday pay to date.  He is finishing at Christmas and wants to spread his leave entitlement over the next 8 to 10 weeks, at around one day’s leave per week - this would put the weekly pay at just under the £110 threshold, with no NI to pay.  He’s 62 years old, by the way.

Officers in Human Resources and Payroll for the firm do not at present agree on whether this is possible. 

1.  On the one hand: “It doesn’t matter to us - a casual contract permits you to work or not work as you wish (and the firm to offer or not offer you employment as it wishes).  The only requirement is that you must take all leave by the end of the leave year (31st March 2011 - no problem there).”

2.  The other view: “You’ve been working 2 days a week for most of this year - you must take your leave at at least 2 days a week to be fair, thus paying some NI each week (as you have been doing to date).  We don’t want the Inland Revenue saying we’re helping you defraud the NI system”

I would have thought that argument 1. above is correct - the guy can take paid AND unpaid leave if he wishes each week, declining further employment as is his right.  If this upsets the employer, the latter can decline to employ him further because they don’t like hiis working pattern.  Which is OK by him !  If a person cuts down his working week to below £110 worth a week, can he really be said to be ‘defrauding the system’ ?

Jim

I don’t know the law on this but as well as the points you make option 2 seems to me to be pretty meaningless because you can extrapolate from it that anyone who works (say) 5 days a week has to take his/her holiday in at least 5 day chunks.  This is most certainly not what happens in many firms.  Unless there is something in the employment contract about this subject then I don’t see how the employer can insist on it.