Further to our previous blog regarding holiday pay which details information regarding the Harpur Trust v’s Brazel case, it has been published today that the Harpur Trust’s appeal has been dismissed unanimously and the ruling still stands.
It was acknowledged that EU case law indicates that, in general, a worker’s minimum holiday allowance is determined by the number of weeks they actually work. Under UK law, holiday pay for people working irregular hours is determined by averaging their pay over the previous 52 weeks. Weeks where no work takes place are ignored in the calculations.
At the tribunal, the school argued that the statutory entitlement of 5.6 weeks holiday pay should be pro-rated where an employee had worked fewer weeks than a standard 46.4 week working year (deducting 5.6 weeks of statutory leave from 52 weeks). Ms Brazel’s entitlement was then pro-rated using the percentage of 12.07% of her term pay. As the school year varied between 32 and 35 weeks a year, this resulted in her holiday pay entitlement being lower than if her holiday pay had been calculated by averaging her normal rate of pay over the 12 weeks prior to the holiday being taken (excluding out-of-term weeks) – the approach outlined in the WTR.
The Court of Appeal stated ‘The WTR do not provide for the kind of pro-rating for which the school argues and which underlies the application of the 12.07% formula in the case of a part-year worker. The exercise required by reg 16 and the incorporated provisions of the 1996 Act is straightforward and should be followed’.
This could open the floodgates for other part-year workers who have had their holiday calculated incorrectly to bring claims for unlawful deductions from wages for any difference in what they have been paid and what they should have received although there is a two year backstop on these claims.
Many employers will now need to make provision for higher holiday pay for their part-year workers and also face a greater risk of tribunal claims where holiday pay has previously been calculated differently.
If you are reviewing your current provisions, contact us to discuss your options Tel: 01252 863700 Email: sales@epayme.co.uk