Holiday entitlement for term-time only workers cannot be pro-rated

Case update: Brazel v The Harpur [2019] EWCA Civ 1402

At the beginning of the year, we reported on the Employment Appeal Tribunal’s decision in the case of Brazel v The Harpur Trust UKEAT/0102/12/LA. The Court of Appeal has now considered how holiday pay should be calculated for term-time only workers.

Recap of facts

Mrs Brazel was a part-time music teacher employed by a school run by The Harpur Trust. She worked mainly during term-time on a zero-hour contract. Mrs Brazel was entitled to 5.6 weeks’ holiday and was required to take that holiday outside of term-time. The Trust paid her accrued holiday entitlement three times a year at the end of each term, calculated by reference to 12.07% of the hours she worked. Mrs Brazel argued that her holiday pay should be calculated according to the average 12-week reference period prior to taking the holiday, as set out in the Working Time Regulations 1998. This would entitle her to a higher proportion of her annual earnings as holiday pay.

The Trust appealed this decision arguing that Mrs Brazel’s holiday entitlement should be reduced to reflect the fact that she worked only part of the year.

Court of Appeal’s decision

The Court of Appeal upheld the decision of the Employment Appeal Tribunal concluding that there was no requirement to pro-rate the leave entitlement of “part-year” workers. The Court noted that it was important to appreciate that the individual in this instance was on a permanent contract and it was not unreasonable to treat this as a sufficient basis for fixing her holiday entitlement, irrespective of her actual working pattern.

What does this mean for employers?

It is recommended that employers review the part-year working arrangements that they currently have in place and the basis on which they calculate that holiday pay to avoid exposure to unlawful deductions from wages claims. While the 12.07% is a set percentage recommended by ACAS for casual workers that many employers use to calculate holiday entitlement, this decision confirms that the formula should not apply to “part-year” workers. If you would like to discuss how this decision impacts on your organisation, please contact Claire Sleep at claire.sleep@ashtonslegal.co.uk or call 01223 431094.