Lawyers Say Decision Will Place Significant Financial Burden On Thousands Of Organisations
The Supreme Court has today ruled that a music teacher who only worked for part of the year is entitled to the same paid holiday as colleagues working all year.
According to employment lawyers at Irwin Mitchell, the ruling will have significant financial repercussions for thousands of employers with people working part of the year on permanent contracts who have pro-rated their holiday entitlement to reflect the number of weeks they actually work each year. It will be particularly significant in the education sector where term-time contracts are commonplace.
The Harpur Trust v Brazel focuses on the issue of whether a worker’s right to paid annual leave is accumulated according to their working pattern and/or should be pro-rated to reflect the fact that they don’t work for a full year.
The Harpur Trust employed Ms Brazel on a zero hours permanent contract to teach music. Her contract provided her with 5.6 weeks’ paid holiday, which had to be taken outside normal school holidays.
The Trust argued however that it could pro-rate her holiday entitlement and pay to reflect the fact that she worked fewer weeks per year than comparable full time staff and to do otherwise would lead to an “absurd result”.
Ms Brazel brought proceedings arguing that this was in breach of the Working Time Regulations and Part-time workers (Prevention of Less Favourable Treatment) Regulations.
She was initially unsuccessful, but the Court of Appeal concluded that workers engaged on permanent part-year contracts must receive at least 5.6 weeks holiday – even if they only worked for one or two weeks a year. This was on the basis that holiday could not be pro-rated because the Working Time Regulations 1998 do not include a pro-rata principle in these circumstances.
Today the Supreme Court unanimously dismissed the school’s appeal. It acknowledged that EU caselaw indicates that, in general, a worker’s minimum holiday allowance is determined by the number of weeks they actually work. However, there is nothing to stop individual countries having more generous provisions. Under UK law, holiday pay for people working irregular hours is determined by averaging their pay over the previous 52 weeks. Weeks where no work takes place are ignored in the calculations.
The Court acknowledged this approach slightly favoured workers, like Ms Brazel, who work atypical hours, but it did not agree that this produced such an absurd result that would justify the wholesale revision of the statutory scheme.
The long-awaited decision has been closely monitored by organisations in the public and private sectors. Many unions have been actively pursuing holiday claims on behalf of term-time only staff. In 2018, Unison helped 5,000 term-time staff employed by Greenwich Council receive compensation for unpaid holiday amounting to almost £4m. Unison also intervened in this case because the principles involved affect hundreds of thousands of other workers.
Expert Opinion“This is a significant decision and will be a blow to many thousands of employers across the UK who, up until now, have pro-rated holiday entitlement to reflect the number of weeks employees work each year. Many employers have adopted a “wait and see” approach. But, we’re now at the end of the road. We’ve seen that organisations have been caught out by previous holiday pay rulings and this one is sure to place a significant financial burden, which could run into millions of pounds, for many.
“This decision only impacts on workers who are engaged in permanent part-year contracts. Your average casual worker engaged on a zero hour’s contract won’t be affected and will only be entitled to receive paid holiday based upon how many weeks they have actually worked.”
Jo Moseley - Senior Associate Solicitor