In the case of The Harper Trust v Brazel (UNISON intervening) the Court of Appeal has decided how holiday pay should be calculated for workers only appointed for part of the year. This decision will impact greatly on sectors who employ staff on a permanent, term-time/party year basis and in particular, the education sector.

Brazel, a music teacher was employed The Hazel Trust on a permanent basis working variable hours during school term time and was defined as a “party-year worker” by the Court.

Brazel took her holiday during the school holidays and her pay was calculated in accordance with the guidance provided by ACAS for casual workers which stated that the statutory holiday entitlement of 5.6 weeks’ is equivalent to 12.07% of hours worked over a year. Brazel therefore received one third of that figure. Brazel however challenged this and considered that she was bring underpaid as a result of this calculate being used and that instead a calculation using the 12-week average of the period immediately preceding the holiday as set out in the Working Time Regulations 1998 (WTR) should be used.

Following an unsuccessful grievance she issued proceedings for unlawful deductions from wages. She was unsuccessful at first instance with the Tribunal stating that it was correct for her holiday to pro-rated to reflect how much she actually worked. She appealed and the Employment Appeal Tribunal allowed her appeal agreeing that there was no reason for the calculation set out in the WTR to be departed from.

The Hazel Trust appealed to the Court of Appeal, submitting that it was not equitable for Brazel to have the entitlement of someone working over 46 weeks of the year when she only worked for 32 weeks of the year. This would entitle her to a higher proportion of her earning than if she worked full-time, receiving 17.5% of her pay rather than 12.07%. The Court of Appeal dismissed The Hazel Trusts appeal.

The Court of Appeal determined that WTR does not provided for pro-rating holiday pay for a part-year workers and that the straightforward calculation set out in the WTR should be followed even if the result of this was that part-year workers would be entitled to a higher proportion or earnings as holiday pay than full-time workers.

The provision for calculations will change in April 2020 in any event with average earnings of the preceding 52 weeks rather than 12 weeks to be used, however any weeks during which zero remuneration was earned will not be taken into consideration.

The ACAS guidance will likely be updated to reflect the decision. Employers should consider any potential liability for underpayments where the ACAS calculation has been utilised.

If you need some more advice speak to our employment team today on 01702 338338.