Case Law: Harper Trust v Brazel
In the case of Harper Trust v Brazel, the Supreme Court has confirmed that workers who only work for part of the year, but on permanent contracts, are effectively entitled to the same holiday allowance as workers who work all year.
Background to the case
Mrs. Brazel brought a claim against her employer, Harpur Trust, in relation to holiday pay. Ms. Brazel was a visiting music teacher, employed on a permanent, zero-hours contract. She was paid for the work she did. Mrs. Brazel did not work a full week and she was not required to work during the school holidays.
She argued that as a worker, she was entitled to a full year’s paid leave (5.6 weeks) in accordance with the Working Time Regulations 1998 and not a pro-rated holiday based on the weeks she actually worked. She also argued that her holiday pay should be calculated based on her earnings in the previous 12-week reference period (now 52 weeks). The Trust- as many employers have done- was following ACAS’ guidance which suggested that employers use a multiplier of 12.07% to pro-rate holiday entitlement for part-year workers. Since the Supreme Court ruling, this ACAS guidance has been removed.
Supreme Court Decision
Where a part-year worker works on a permanent contract throughout the holiday year but has irregular hours and pay they are entitled to 5.6 weeks statutory leave and their holiday pay should be calculated, not on a pro-rata basis, but based on a ‘week’s pay’ averaged out over the previous 52 weeks.
The effect of the judgment is that Mrs. Brazel ad other similar workers who work atypical working patterns or who don’t work a full leave year will be paid proportionally more by way of holiday pay than those who work full-time or part-time.
Next Steps
Firstly, employers must assess the number of workers that could be impacted by this decision. Employers should also ensure that when calculating holiday pay, they use the correct calculation moving forward and make any amendments to workers’ contracts to reflect how holiday pay will be calculated moving forward. Employers may also consider in the future, whether a fixed-term or a temporary contract rather than a permanent one.
Employers may want to use this as an opportunity to review the working patterns they have in place and particularly how permanent contracts are used for employees working different patterns.
