07 February 2023

Statutory annual leave pay consultation

In 2022, in the case of Harpur Trust v Brazel, the UK Supreme Court (UKSC) held that part-year workers are entitled to disproportionately more statutory annual leave than part-time workers.

Brazel worked as a music teacher on a permanent zero-hours contract for the Trust.  She worked in term times only and her weekly hours varied depending on the number of pupils requiring lessons.  Brazel took her annual leave in the three school holidays and her pay for annual leave was made to her at the end of each school term calculated on the percentage method, resulting in her receiving 12.07% of her pay in the previous term.

Brazel claimed that she was entitled to be paid for 5.6 weeks’ holiday, based on her average pay during weeks that she had worked (as set out for workers with no normal working hours). She argued that the 12.07 percentage method (since withdrawn)was an Acas construct and had no basis in statute.

The Trust’s argument was that it made no sense for there to be no pro-rating as the calculation should reflect annual leave entitlement that was related to hours, actually worked.

The ET agreed with the Trust, and Brazel appealed to the EAT who agreed with her, and in turn so did the CA, and the UKSC.

To address this disparity, the Government propose to replace the 52-week reference period when weeks in which no pay is earned are ignored, with a 52-week reference period which includes weeks when no remuneration is earned, for part-year and irregular hours workers. The Government also propose to re-introduce the 12.07% multiplier to calculate holiday entitlement for those workers.

The consultation closes on 9 March 2023.

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