STOP PRESS: The Harpur Trust v Brazel: Supreme Court provides clarity on the calculation of holiday pay for part-year workers

The Supreme Court (SC) finds for Ms Brazel in the landmark judgment of The Harpur Trust v Brazel on the calculation of holiday pay for those who work irregular hours over part of the year (‘part-year workers’).

Schools and employment lawyers alike have been keeping a watchful eye on the case of The Harpur Trust v Brazel for clarity from the SC on the calculation of holiday pay for part-year workers.

Today, the SC handed down its much-awaited judgment and the Harpur Trust has lost its appeal. This means the decision of the Court of Appeal (set out below) stands.

The Court of Appeal’s decision

By way of reminder, this is the case of a visiting music teacher who worked term-time only and challenged her employer’s method of calculating her holiday entitlement and pay, arguing that she should be given the same holiday entitlement as a year-round worker.

The Court of Appeal’s (CA) decision had far reaching implications for the way in which schools calculate holiday pay for part-year workers. It held that the holiday entitlement of part-year workers should not be pro-rated to that of year-round workers, to reflect the fact that they do not work throughout the year. In reaching this decision the CA made it unlawful to use the customary multiplier of 12.07% (a pro-rated amount of the statutory 5.6 weeks holiday) because is not permitted by the Working Time Regulations 1998. This was particularly relevant for workers on zero-hour contracts, or those who work irregular hours.

Despite not working a full year, the CA held that part-year workers were still entitled to 5.6 weeks’ holiday and, even though this resulted in a higher rate of accrual and pay than year-round workers, employers simply had to follow the normal methodology for calculating holiday pay using the formula in the Employment Rights Act 1996 (‘ERA’). So, to calculate holiday pay for these individuals, at the time holiday is to be taken, employers should identify ‘a week’s pay’ in accordance with the ERA and multiply that figure by 5.6.

This decision had a significant impact on schools, given the number of staff who work irregular hours over part of the year (e.g. zero hours music teachers, sports coaches, and exam invigilators) where they had typically calculated holiday pay for these individuals using the 12.07% multiplier. Many schools were understandably worried about an influx of unlawful deduction of wages claims from staff affected by this decision.

For further information on the CA’s decision and its implications, please refer to our previous articles which can be found here and here.

The Supreme Court’s decision

The SC’s final decision on this issue is to dismiss the appeal by the Harpur Trust against the decision of the CA.

This judgment provides the much-needed clarity on how schools should approach calculating holiday entitlement and pay for part-year workers.

We will provide a further substantive update for schools shortly once we have sight of the full reasoned judgment. In particular we will consider the ripples this judgment will create in relation to claims which are currently stayed and backdating any claim for holiday pay as well as any changes to staff contracts. For any specific queries in the meantime, please get in touch.