Holiday pay and part-year workers

The Supreme Court has dismissed the appeal in the Harpur Trust v Brazel holiday pay case, upholding that the holiday entitlement of workers who work only part of the year but are engaged on a permanent contract throughout the year (‘part-year workers’) cannot be calculated by using 12.07% of the hours actually worked but must be calculated using the average hours worked over the previous 52 weeks, disregarding any weeks not worked.

Mrs Brazel is a visiting music teacher who is engaged on a zero-hours contract to work during term times and works a variable number of hours during weeks in term time and does not work for the whole year. Her employer calculated her pay for holidays (which she took during the school holidays) on the basis of 12.07% of hours worked, which was less favourable to her than a calculation based on her average week’s pay multiplied by 5.6 (the leave allowance under the Working Time Regulations). She brought a claim for unauthorised deductions from pay which succeeeded in the EAT and the Court of Appeal, and the Supreme Court has now dismissed Harpur Trust’s appeal.

The Supreme Court has held that holiday pay for part-year workers should be calculated using the averaging method (now 52 weeks), ignoring any weeks that have not been worked. Even though this is likely to result in higher rates of holiday pay for atypical workers, the Supreme Court was satisfied that this is the correct method of calculation under the Working Time Regulations.