Harpur Trust v Brazel is a significant case relating to holiday pay and entitlement.
The claimant was a visiting music teacher who worked at a school run by Harpur Trust. She had a permanent contract on a zero-hour basis and was paid for the hours she worked. She worked term time, and her holiday pay was calculated on the basis of 12.07% of her pay. This was paid at the end of each term.
In theory that percentage ensured she had her accrued holiday pay each term and it took account of the generous holiday periods that schools enjoy and the fact that she did not book holiday at any other time.
Ms Brazel disputed this calculation on the basis she was not receiving her true holiday pay and was being underpaid if this method was used.
The tribunal initially dismissed the claim but the Court of Appeal overturned the decision.
The Supreme Court agreed and ruled that part-year workers are still entitled to 5.6 weeks’ annual leave regardless of how much work is done. So entitlement will accrue even though they might only work six weeks per year.
In addition they decided that the average holiday pay should also have been worked out on just working weeks and not, working and non-working weeks. In Brazel, using the working week approach meant that the claimant was entitled to 17.5% of her pay for work done and as such this decision could lead to some part-year workers receiving more holiday pay than other full-time employees.
The Harpur Trust v Brazel case confirms that 12.07% is not a reliable method of calculating holiday pay and where weeks are not worked, they should not be considered.
For part-year workers on permanent contracts, employers should work out holiday pay based on the previous 52 weeks which were worked (or where pay was due) and ignore the non-working weeks. If in the last year the person has not worked 52 weeks, the employer must go back further until there are 52 weeks to use (unless they simply have not worked 52 weeks).
While this decision may cause concern for some, it appears to suggest that those on irregular part-year hours should only be so, if it is absolutely necessary. Otherwise, employers should ensure employees are appointed on appropriate terms, so they do not accrue excessive amounts of leave for only having worked two or four weeks in a year.
The government has opened a consultation on the specific calculation needed for part-year workers so further clarification is set to come.
If you are an employer with questions about employee holiday pay and entitlement or any aspect of employment law contact our Stoke-on-Trent solicitors on 01782 205000, our Altrincham solicitors on 0161 929 8494 or our Birmingham solicitors on 0121 516 3025. Alternatively, you can email firstname.lastname@example.org.