Government opens holiday pay consultation

The case related to how holiday pay and leave should be calculated for workers who work throughout the year, but only work part-time.

Brazel, a music teacher at a school run by the the Harpur Trust worked a variable number of hours each week and was only paid for the hours that she teaches during term time.

It was accepted by the Harpur Trust that Brazel is a “worker” within the meaning of the Working Time Regulations 1998. This entitled her to 5.6 weeks of paid annual leave. She took this leave during the school holidays, but because she was not required to work during the school holidays, in practice there were more than 5.6 weeks each year in which she did not work.

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In September 2011, the Harpur Trust changed its calculation method, calculating Brazel’s hours worked at the end of each term, taking 12.07% of that figure and then paid Brazel her hourly rate for that number of hours as holiday pay. 12.07% is the proportion that 5.6 weeks of annual leave bears to the total working year of 46.4 weeks, reflecting only the hours she worked, meaning she received less holiday pay.

She brought the claim to the Employment Tribunal for unlawful deductions from her wages by underpayment of holiday pay.

The Employment Tribunal dismissed her claim, but the Employment Appeal Tribunal allowed her appeal. The Court of Appeal then dismissed the Harpur Trust’s appeal, ruling in July that the percentage method should not be used.

The ruling essentially means, according to BrowneJacobson law firm, that part-year workers, receive the same 5.6 weeks’ statutory leave as full-year workers, despite one working for fewer weeks than the other.

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On Friday, a consultation was opened by the government seeking views on proposals to pro-rata holiday entitlement for part-year and irregular hours workers based on the annual hours they work.

“The government is keen to address this disparity to ensure that holiday pay and entitlement received by workers is proportionate to the time they spend working.

“The consultation seeks to understand the implications of the judgment on different sectors including agency workers who have complex contractual arrangements. The government wants to ensure that any changes we consider do not have any adverse impacts on other parts of the legislation.”

The report estimates that between 320,000 and 500,000 permanent term-time and zero-hours contract workers will receive more holiday entitlement. Approximately 37% of these are workers in the education sector, such as teaching assistants who are employed on part-year contracts.

Government analysis estimates that there are between 80,000 and 200,000 agency workers who may receive more holiday entitlement under this judgment.

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