Holidays for term-time only workers not subject to pro rata reduction
In The Harpur Trust v Brazel the Court of Appeal has found that a part-time music teacher should have her accrued holiday entitlement calculated in accordance with the 12-week averaging calculation under Regulation 16 of the Working Time Regulations 1998 (the WTR) and section 224 of the Employment Rights Act 1996. This provides that the amount of a week's pay is the amount of the employee's average weekly remuneration over a 12 week period.
The claimant worked during term time under a zero-hours contract, under which her weekly hours fluctuated, and she was required to take her holiday during school holidays. Her contract stated that she had the right to 5.6 weeks' annual leave. The school calculated her entitlement to holiday pay as 12.07% of the hours worked the preceding term, relying on Acas guidance which states that the statutory holiday entitlement of 5.6 weeks equates to 12.07% of hours worked over a year.
The Court of Appeal held that the fact that the requirements of the Working Time Directive (WTD) are satisfied by the pro rata approach (termed the accrual approach by the Court), does not mean that such an approach is mandatory. It pointed out that the WTD does not prescribe any particular mechanism for the assessment of holiday entitlement, and Article 15 of the WTD states that member states may accord workers entitlements which are more favourable than those required by the WTD. It concluded that there was no requirement as a matter of EU law to give effect to the pro rata principle.
The Court then considered the WTR, and noted that they make no provision for pro-rating, requiring "the straightforward exercise of identifying a week's pay in accordance with the provisions of sections 221-24 and multiplying that figure by 5.6".
Take note: The decision in Brazel is limited to cases of "part-year workers" on permanent contracts. The Court defined a "part year worker" as someone who does not work a full working week and who, for parts of the year (in this case the school holidays) has no work at all. This means that, although the decision will not affect part-time workers, it may impact on those using zero hours staff on permanent contracts where the 12.07% calculation figure will potentially be open to challenge.
It's worth noting that since this decision, BEIS has removed references to the holiday pay calculator from its guidance on calculating holiday pay for workers without fixed hours or pay. The guidance now states that mention of the holiday pay calculator has been removed, "while the service is under review". It is not yet known when the outcome of the review will be known.