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The wait is nearly over: Supreme Court set to clarify position on holiday pay

On 9 November 2021, the Supreme Court heard the appeal from the Court of Appeal from Harpur Trust v Brazel in order to deal with the question of whether a worker's right to paid annual leave is accumulated according to the working pattern of the worker and/or is pro-rated.

Facts

The respondent in this case was a visiting music teacher to the appellant Trust, engaged on a zero hours contract to work during term time only. As a worker, she was entitled to 5.6 weeks holiday a year, which is reflective of 5.6 weeks paid holiday for each 46.4 weeks worked (therefore at a rate of 12.07%). The respondent however argued that the 12.07% calculation did not comply with the calculation required under the Working Time Regulations 1998 and should be calculated in accordance with her average earnings over the 12-week period immediately before holiday was taken.

The matter passed through the Employment Tribunal, Employment Appeals Tribunal and the Court of Appeal, with the latter decision being that despite not working the full year, the respondent was still entitled to 5.6 weeks holiday and her holiday pay should not be limited to 12.07% of her salary, but should be calculated at the end of each term based on average earnings over the previous 12 weeks where she was remunerated. On this basis, the holiday pay rate was higher, at a rate of 17.5%.

Impact

Given the number of staff who work irregular hours over part of the school year, the current position has, understandably, caused much concern amongst schools, particularly in respect of potential unlawful deduction of wages claims. The imminent Supreme Court judgment is therefore both long awaited and welcomed in order to provide some clarity on the position.

In the event that the Court of Appeal's decision is overturned, the practice of calculating holiday pay as 12.07% of pay for workers such as Brazel would be reinstated, which would be a welcome outcome for employers. However in the event that the decision is upheld, employers will need to change their practices (if not already done so), and be prepared to deal with any claims from affected workers in respect of underpaid holiday pay.

We await the judgment from the Supreme Court being handed down and are ready to support and provide advice, whatever the outcome. If you have any questions or would like to discuss in any further detail, please don't hesitate to contact the Employment specialists in the Education Team

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