Supreme Court dismisses appeal in Harpur Trust v Brazel holiday pay case: Employers cannot use 12.07% to calculate holiday for part-year workers

At a glance

• The Supreme Court has dismissed the appeal from the Court of Appeal’s judgment in Harpur Trust v Brazel, holding 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.

The Supreme Court has dismissed the appeal from the Court of Appeal’s judgment in Harpur Trust v Brazel, holding 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 was and remains a visiting music teacher who is engaged on a zero-hours contract to work during term times. She works a variable number of hours during weeks in term time and does not work full-time or for the whole year. As a worker under the Working Time Regulations she is entitled to 5.6 weeks’ paid annual leave each year, which she takes during the school holidays. Before September 2011, Mrs Brazel’s holiday pay was determined by calculating her average week’s pay over a 12 week period and multiplying that by 5.6. In 2011, Harpur Trust altered how it calculated the amount of holiday pay, instead calculating holiday pay on the basis of 12.07% of hours worked, which was less favourable to her. Mrs Brazel brought a claim for unauthorised deductions from pay in the Employment Tribunal, which decided against her, but on appeal both the EAT and Court of Appeal decided in her favour. The Supreme Court has now dismissed Harpur Trust’s appeal.

The Supreme Court held that holiday pay for part-year workers should be calculated using the averaging method (over a period of 12 weeks at the time of the claim, now 52 weeks), ignoring any weeks that have not been worked. The pro-rata approach taken by the employer was wrong. 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. The Supreme Court rejected Harpur Trust’s argument that a part-year worker’s leave must be pro-rated to account for weeks not worked. The Supreme Court held that it was not necessary for Mrs Brazel’s entitlement to annual leave to be tied to the amount of work done or to be proportional to the entitlement of a full time worker. The alternative calculation methods suggested by Harpur Trust were directly contrary to the statutory calculation method set out in the Working Time Regulations. The Supreme Court did not accept that the fact that a worker is Mrs Brazel’s position receives holiday pay representing a higher proportion of her annual pay than full time workers or part time workers working regular hours was so absurd as to justify wholesale revision of the Working Time Regulations.