Holiday pay for term time only workers should not be pro-rated to full time workers

Insights - 03/12/2019

Holiday entitlement is a sensitive issue for workers and those employed part time often feel they are losing out.  The recent Court of Appeal case of The Harpur Trust v Brazel has provided helpful clarification on calculating holiday pay for term time only staff.

Ms Brazel was a music teacher employed on a zero hours contract at Bedford Girls School. The Trust paid her holiday entitlement at the end of each of the three terms in the school year. Like many employers, this was calculated pro rata to the full-time entitlement of 5.6 weeks holiday (the statutory minimum holiday entitlement that equates to 28 days holiday per annum for those working full time).  Ms Brazel complained that this method of calculating her pay was inconsistent with the Working Time Regulations 1998. The Court of Appeal agreed.

The Court held that to comply with the Working Time Regulations 1998, which does not provide for pro rating, the correct calculation of holiday pay for term time only workers is the exercise of identifying a week’s pay (based on an average over 12 weeks where it varied) and multiplying that by 5.6 weeks. The result is that Ms Brazel is entitled to holiday pay at a rate of 17.5% of her earnings, rather than 12.07% received by full time staff. No account was to be taken of the fact that she only worked for part of the year.

The court was careful to distinguish between part year workers (such as Ms Brazel) and those who work part time throughout the year; the calculation of whose holiday pay is not affected by this decision. For such workers, holiday pay is calculated by the number of days or hours worked.

Lord Justice Underhill commented:  “It may at first sight seem surprising that the holiday pay to which part-year workers are entitled represents a higher proportion of their annual earnings than in the case of full-year workers, but I am not persuaded that it is unprincipled or obviously unfair.”

Permission has been applied for to appeal to the Supreme Court.

Should you require more information about the issues raised in this blog contact your usual Morrisons adviser or Emma McLoughlin, senior associate solicitor in the employment team: [email protected]

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