Getting a headache from calculating holiday pay for “part-year” workers? New developments
27 July 2022
The long-awaited decision of the Supreme Court in the case of Harpur Trust v Brazel [2022] UKSC 21 confirmed that term-time, or part-year workers, whose contract extends through the year part should not have their paid holiday pro-rated and are instead entitled to the statutory 5.6 weeks paid holiday.
The Claimant in this case was a music teacher during term-time for Bedford Girls School which was run by The Harper Trust. The Claimant was hourly paid and worked variable hours. All employees were entitled to 5.6 weeks annual leave which needed to be taken during the school holidays.
The Trust paid holiday at the end of each term and in 2011 changed its method of payment to multiplying the hours she worked each term by 12.07 per cent and then multiplied that figure by her hourly rate of pay. The Claimant brought a claim for unlawful deduction from wages by underpayment of her entitlement to holiday pay on the basis that the change in method of payment resulted in her receiving less holiday pay.
The Trust argued that this reflected her accrued leave in proportion to the hours she actually worked.
Whilst the Claimant initially lost in the Employment Tribunal, this decision was overturned by the EAT, to which both the Court of Appeal and now the Supreme Court agreed.
The Supreme Court held that there is nothing in UK legislation which allows for “part-year workers” paid holiday should be pro-rated and it rejected the Trust’s argument that it would be unfair in some circumstances.
The Supreme Court noted that nothing in the Part-Time Workers Regulations prohibited such workers from being treated more favourably than someone working throughout the year.
The decision will impact any employer who engage zero-hours, term-time only or part-year workers (i.e. workers on permanent contracts who do not work the entirety of the year).
The position is now clear that part-year workers are entitled to 5.6 weeks holiday per year and their holiday pay should be calculated by reference to average earnings over 52 weeks (ignoring any weeks in which no work was carried out), not by reference to the hours worked.
We recommend that you carry out an assessment of how you are currently calculating holiday entitlement and holiday pay for part year workers and speak to a member of our Employment Team on 01254 828300 for further advice. Find out more about our employment team here.
