Update from Noella Gooden, Employment Solicitor (Australian qualified)
The Supreme Court has handed down its much anticipated decision in Harpur Trust v Brazel. It has reaffirmed the earlier decision by the Court of Appeal that an employer cannot pro-rata holiday entitlement for part-year workers according to the number of weeks they work in a year.
What was the dispute in Harpur Trust v Brazel?
Mrs Brazel was a visiting music teacher at Bedford Girls School. She was employed by the Harpur Trust on a zero-hours contract. She did not work a set number of hours per week, rather her hours would vary according to demand for music lessons. She worked during the school term time only and did not work during the school holidays. She was paid monthly, according to the hours she had worked in the previous month. Schools, nurseries, and charities often employ people who work similar patterns to this and are commonly known as ‘Term Time Only’ staff.
The Working Time Regulations 1998 (“WTR”) applied to Mrs Brazel’s employment, which provides that she is entitled to 5.6 weeks paid annual leave per annum. The Employer followed the ACAS advice on holiday pay (which has since been removed from the ACAS website) which was to pay Mrs Brazel at the end of each school term, an amount of 12.07% multiplied by the total hours worked that term, on account of holiday pay. Thus, in effect, she accrued holiday pay only for the weeks that she worked, and not for all weeks of the year. Mrs Brazel argued that this was the wrong approach.
The essential difference between the parties was whether the calculation of Mrs Brazel’s holiday entitlement (or holiday pay) should be pro-rata to that of a full-year worker to reflect that she does not work throughout the year, but during term time only.
Prior to the decision in this case, it has been common practice for employers to pro-rate holiday entitlements for term time staff. An example of how some employers have historically calculated holiday pay for staff is as follows:
- A full-time staff member, working 52 weeks per year, receives 5.6 weeks leave in accordance with statutory requirements.
- A term-time only staff member, who works 38 weeks per year receives leave calculated as follows: (38/52) x 5.6 weeks = 4.09 weeks leave.
In this example, similarly to the case of Mrs Brazel, an employer will pro-rata the entitlement to leave according to the number of weeks that the employee actually works during the year.
What does this mean for employers?
Employers of part-year employees could face numerous claims for unpaid holiday entitlement, if they have pro-rata leave according to the number of weeks that an employee works in a year. Employers will also need to update and amend their contracts of employment and employee handbooks accordingly.
Grant Saw Solicitors can help you with compliance with the relevant legislation surrounding holiday pay. Please feel free to email me or contact our Employment Law team on 020 8858 6971 should you wish to discuss any concerns you might have about claims for unpaid holiday pay.