Holiday pay for part-year workers…the long-awaited Supreme Court judgment is out!

If you were hoping that today’s Supreme Court decision in the case of Harpur Trust v Brazel would bring some much needed clarity on holiday pay for ‘part-year’ workers, you’ll be as disappointed as we were!

The appeal concerned the calculation of holiday pay for a music teacher who worked for varying hours during certain weeks of the year but had an employment contract lasting throughout the year – for ease she was referred to as a “part-year worker”.  In September 2011, the Harpur Trust changed its calculation method and in line with Acas guidance (now re–written), they calculated Ms Brazel’s hours worked at the end of each term, took 12.07% of that figure and then paid Ms Brazel her hourly rate for that number of hours as holiday pay (“the Percentage Method”). 12.07% is the proportion that 5.6 weeks of annual leave bears to the total working year of 46.4 weeks. The Harpur Trust therefore treated Ms Brazel as entitled to 12.07% of her pay for the term, reflecting only the hours she actually worked. Using the 12.07% accrual rate was standard practice at the time in many organisations.

The effect of this change was that Ms Brazel received less holiday pay than she had under the previous calculation.  She brought a claim before the Employment Tribunal (ET) for unlawful deductions from wages. The ET dismissed her claim, but the Employment Appeal Tribunal allowed her appeal holding that the statutory regime required the use of the Calendar Week Method (i.e. that she be given 5.6 weeks holiday).  The Court of Appeal dismissed the Harpur Trust’s appeal.

Although a worker in Ms Brazel’s position would receive holiday pay representing a higher proportion of her annual pay than full-time or part-time workers working a full year and regular hours,  the Supreme Court also rejected the appeal.  Although the Harpur Trust’s contention that the Calendar Week Method leads to an absurd result, is undeniable, the Supreme Court ruled that it is not so absurd as to justify the wholesale revision of the statutory scheme, which the Harpur Trust’s alternative method would require.

Click here for the full judgment.