The Supreme Court has ruled today that a music teacher who only worked for part of the year, albeit on a year-round contract, was entitled to the same paid holiday as employees working all year, unanimously dismissing an appeal in landmark case The Harpur Trust v Brazel.
The case focused on whether a worker’s right to paid annual leave is accumulated according to their working pattern, and if it should be pro-rated if they do not work for the full year.
Brazel was employed by The Harpur Trust on a zero-hour permanent contract, which provided her with 5.6 weeks of paid holiday, which she takes during school holidays. The holiday pay entitlement of 5.6 weeks is equivalent to 12.07% of hours worked over a year; however, in practice there are more than 5.6 weeks where she does not work at all, due to her contracted pattern.
From September 2011, the Harpur Trust changed its calculation method, calculating Brazel’s hours at the end of each term and taking 12.07% of that figure to work out her holiday entitlement. The trust argued to the court that it could pro-rate her holiday entitlement and pay, to reflect the fact that she worked fewer weeks per year than comparable full-time staff.
Brazel brought proceedings to the Employment Tribunal arguing that this was in breach of the Working Time Regulations and Part-time workers (Prevention of Less Favourable Treatment) Regulations, and that her holiday pay should by calculated using her average earnings over a 12-week period and not pro-rated.
The Court of Appeal concluded that workers on permanent part-year contracts must receive at least 5.6 weeks of holiday, even if they have only worked for one or two weeks a year, on the basis that holiday could not be pro-rated because the Working Time Regulations 1998 do not include a pro-rata principle in these circumstances. The case was then taken to the Supreme Court.
The Harpur Trust suggested that although Brazel was better off under the Calendar Week Method, other hypothetical workers working other irregular hours patterns could be worse off under that approach.
The Supreme Court rejected the contention that the Calendar Week Method might lead Brazel to receive holiday pay representing a higher proportion of her annual pay than full or part-time workers with more regular hours. Even in the case of a slight favouring of workers with a highly atypical work pattern was not deemed to justify the wholesale revision of the system.
Anna Sella, managing associate at Lewis Silkin, said: “The Supreme Court’s decision means this area of law remains a complicated one for employers, in particular, to navigate in respect of workers on permanent contracts engaged for the year but who work less than that. In the meantime, employers may wish to reconsider the circumstances in which they make use of permanent contracts for certain types of workers.”
Lesley Rennie, senior employment solicitor at Worknest, added: “This ruling means many employers will need to immediately change their holiday pay practices. This includes those who employ permanent zero hours, ad hoc or term-time workers, and have applied the 12.07% formula to calculate holiday accrual and who have either waited for the finality provided by the Supreme Court’s decision or who have, up until now, been unaware of this case.”
Joanne Moseley, an employment lawyer at Irwin Mitchell, said: “This is a significant decision and will be a blow to many thousands of employers across the UK who, up until now, have pro-rated holiday entitlement to reflect the number of weeks employees work each year.”
A spokesperson for The Harpur Trust added: “We accept the judgement of the Supreme Court. The ruling will have significant cost implications for a number of sectors, including state and independent schools, the care sector and higher education. We welcome the clarity that this judgement brings and will now focus on determining our next steps in ensuring that holiday pay is adjusted for those affected”.
