The Harpur Trust v Brazel
The Claimant was employed as a music teacher at a school part time. She had a zero hour contract and did not work every week. Her contracted holiday allowance was the equivalent of 5.6 weeks. She was only permitted to take her leave outside of term time. Her holiday pay was calculated using the following formula: the holiday allowance of 5.6 weeks was divided by 46.4 which is the remaining weeks in the year after the holiday allowance is removed. This amounts to 12.07% of the hours the Claimant worked in the course of a term. This was paid in three parts and was in line with ACAS recommendations on this issue. However, the Claimant and her union argued that holiday pay should be calculated using the formula from the Working Time Regulations (WTR) namely by taking an average of her weekly earning over the 12 weeks (as it was then) before the holidays were taken.
The Claimant was unsuccessful at tribunal because it was evidenced that if the calculations in the WTR were applied to the Claimant’s situation she would receive proportionately more holiday pay than a full time employee would, 17.5% more to be exact. Therefore, the tribunal concluded that the regulations should be taken to read that workers who do not have standardised hours and who do not work more than 46.4 weeks annually should have their pay calculated on the 12.07% basis.
On appeal the EAT decided that the WTR formula should apply. It was not persuasive that this may lead to unfairness against full time employees. There is a legal obligation to not treat part time workers unfairly, but this obligation does not work the other way.
Court of Appeal
The school appealed this decision, but the appeal was dismissed. Describing the Claimant as a “part year worker” the court stated that the WTR does not allow for the formula that the school had been using. If the 12 week approach results in a benefit to part year workers then this is just to be accepted.
This has since been appealed to the highest court in the UK. The Supreme Court heard the case on 9 November 2021 and we expect the judgement to be handed down in early 2022.
What does this mean for employers? If the Claimant is successful, the impact will be quite significant. Many schools and other businesses that employ workers who do not work the whole year will have to change how they pay their holidays. There may also be a wave of unlawful deduction of wages and unpaid holiday claims. It is important that advice is taken on how to handle these issues.
If you have any questions on any of the issues mentioned in the above article, please contact Natalia Milne.