Court of Appeal: part-year workers should not have their holiday pay pro-rata

Holiday pay for staff who work irregular hours for part of the year should not be pro-rated, the Court of Appeal has ruled in Brazel v The Harper Trust (UNISON intervening) (2019) EWCA Civ 1402).

It is a landmark decision which could affect thousands of people, including many teachers and school staff employed on zero hours contracts who are not paid outside term time.

The ruling means that holiday pay must now be calculated using a worker's average earnings over a 12-week period and not a pro-rata percentage of hours worked across the whole year.

UNISON, the public service workers union which intervened in the case, said that the ruling would clarify the legal position "ensuring all workers are entitled to a minimum of 28 days' paid annual leave, even if they do not get given work or paid for parts of the year".

Background

Mrs Lesley Brazel was a music teacher who worked for a Bedfordshire school during term-time only.

She claimed she lost out on holiday pay because the trust which ran the school used the widely established ACAS guidance to cap her leave at 12.07 per cent of the hours she worked annually.

Arguing this was unfair, she took her case to an employment tribunal where it was dismissed.

She then successfully appealed to the Employment Appeal Tribunal (EAT) which agreed that her holiday pay should be calculated using section 224 of the Employment Rights Act 1996 based on her pay for the previous 12 weeks worked and thus a higher rate.

The trust then appealed to the Court of Appeal but judges endorsed the EAT's decision.

Implications

The Court of Appeal's decision confirms that workers or employees on permanent contracts who only work for part of the year are entitled to a minimum 5.6 weeks holiday which should not be pro-rated.

This should be calculated using the employee's average pay over the previous 12 weeks worked.

This rule applies even if people work just a few months a year but does not affect permanent part-time staff because their 5.6 weeks holiday pay already reflects their actual hours.

For help and guidance about this area of the law, please contact Wards Solicitors' Employment team, Business Employment team or Employment Law Specialist Solicitor Julia Beasley directly.