The important holiday pay case of the Harpur Trust v Brazel (“Brazel”) returned to the headlines this January with news that the Government was launching a consultation into the calculation of holiday entitlement due to part year workers and those working irregular hours. We produced a briefing note on the key questions arising from the consultation which can be found here.
The consultation effectively proposes a reversal of the judgment in Brazel allowing holiday pay to be pro-rated for those working part of the year and irregular hours, as for year-round staff.
The consultation closed on 9 March 2023 and the Government is now analysing the feedback received in response. It will then provide a summary of who responded, the views expressed to each question and any other significant comments. This feedback should normally set out what decisions have been taken in the light of the consultation exercise and be published before or alongside any further action, e.g., laying legislation before parliament. There is currently no timeframe for the publication of this response.
Impact on schools
As it stands, the Supreme Court decision in Brazel remains binding law and legislation will be required to alter the current method of holiday pay calculation. Nevertheless, the consultation offers hope that the disparities caused by the decision will be addressed.
Many schools have already made changes to the way in which they calculate holiday pay for part-year workers as a result of the decision in Brazel. However, as noted previously, schools that are currently considering implementing changes may wish to seek advice in the light of the consultation. Several schools in this position are taking the strategic decision to pause implementing any changes at this stage, at least until the response to the consultation is issued and we have more information as to whether any legislative changes are likely to be introduced.
This is not without risk, given that the Supreme Court judgment is binding law and will remain so in the absence of legislation. It reflects, however, the uncertainty caused by the Government consultation and the difficulty in reversing advantageous changes in holiday pay arrangements in the event the proposals set out in the consultation are implemented.
That said, some schools may decide to take the approach of proceeding with changes to holiday pay in accordance with the Supreme Court judgment, but not accede to any claims for back pay unless or until such time that this is actively challenged by staff. If any requests for back pay are received, it is potentially open to schools not to make such payments until we have further clarity as to the outcome of the consultation.
Schools are taking different approaches in relation to this depending on their appetite for risk; concerns over employee morale; whether any staff have raised questions; and the extent of any potential liability. Communication with staff will be key, and schools will need to respond carefully to questions from staff and particularly any requests for back pay whilst the consultation is ongoing.
We would strongly encourage schools in this position to seek legal advice and would be happy to assist. If you have any questions or wish to discuss this, please contact Oliver Daniels, Rachel Parkin, or your usual contact within the Team.