The Court of Appeal has confirmed that term time workers’ holiday pay should not be on a pro-rata basis, but should instead be calculated using their average earnings over the preceding 12-week period.
Lord Justice Nicholas Underhill stated that the working time regulations did not require leave for workers to be reduced to a pro-rata basis. He introduced the term “part-year worker” to describe somebody on a permanent employment contract who only worked for part of the week for part of the year.
Employment Tribunal: Term Time Workers’ Holiday Pay Calculated Correctly
In the case of The Harpur Trust v Brazel, Brazel was a part-time music teacher employed by the Trust on a zero-hours contract. The Trust calculated her earnings at the end of each term and paid her one-third of 12.07% of that figure — the formula recommended by ACAS for calculating casual workers’ holiday pay. She took her case to an Employment Tribunal (ET), arguing that the method used by the Trust meant that she had lost out. However, the ET ruled that the Trust had been calculating her pay correctly. Brazel proceeded to appeal the decision at the Employment Appeal Tribunal (EAT).
Decision by the Employment Appeal Tribunal
The trade union, UNISON, requested to intervene and supported Brazel. She claimed that the method of calculation did not comply with the working time regulations and resulted in a lower figure. She further argued that holiday pay for term time workers should be calculated by taking the average weekly remuneration for the 12 weeks prior to the calculation date and multiplying it by 5.6. The EAT ruled in her favour.
On 6 August 2019, the Court of Appeal upheld the decision. This decision means that the holiday entitlement for term time workers should be calculated differently to part-time staff who work the full year, even if it resulted in the employee receiving a higher proportion of their annual earnings than in the case of full-year workers.
This will likely impact many employers. For further information about calculating holiday pay for term time workers or other HR-related matters, please contact our Employment team on 0161 475 7676 or email [email protected].