Very sorry for the delay in responding, we seem to have had some problems during the period the forum was being prepared to transfer to its new web address.
First of all, temporary workers who are engaged as employees (as opposed to being supplied by an agency) are protected by the Fixed-term Employees Regulations, and you are required to provide the same pay and benefits as are provided to permanent employees doing the same job, but pro-rata as appropriate. So, holiday entitlements must be the same as permanent staff doing the same job. There is guidance for employers at http://www.businesslink.gov.uk/bdotg/ac ... 1081853623
How you handle the holiday pay for Christmas is a contractual issue and depends on how the rules are defined in your employment contracts. The question to ask is, what would you do in the same situation for a permanent employee who started with you during December and had not accrued 3 days for the Christmas break? I suspect you would pay what holiday was available and not pay for one day. Another option is to pay up for the 3 days and hope the person stays long enough to accrue some more. Some contracts make provision for deducting "over-taken" holiday on termination.