The position regarding holiday pay entitlement for workers with varying work patterns was considered by the Court of Appeal in the 2019 case of Harpur Trust vs. Brazel
Case Study
Ms Brazel, a clarinet and saxophone teacher worked at schools providing individual lessons to its pupils. She worked on average between 10 and 15 hours per week. She was paid by the hour and did not work during the school holidays. Ms Brazel was required to take her holiday entitlement.
The school did what many employers do and referred to the ACAS guidance which outlined the holiday pay being calculated at 12.07% based on the hours worked. The school paid Ms Brazel her holiday pay in three chunks in March, August and December each year, based on the hours she had worked.
The calculation
Why 12.07%? For each holiday year, a worker is entitled to 5.6 weeks’ leave according to the statutory minimum under the Working Time Regulations. When calculating holiday entitlement, you acknowledge that those 5.6 weeks of the year will not be worked. The pay is therefore calculated as 52 weeks minus 5.6 weeks is 46.4 weeks. 5.6 divided by 46.4 is 12.07%.
Ms Brazel’s position was that the 12.07% calculation left her worse off than she should have been under the working time regulations. This is because the regulations state that people who work varied hours holiday pay should be calculated on an average of the previous 12-week remuneration.
On the employer’s side, they argued that the averaging method would give an unfairly generous result for Ms Brazel when compared with other members of staff. Based on the hours in question, it would have resulted in the Claimant receiving 17.5% of her hours worked as holiday pay – a significant difference.
The verdict
The case went to the employment tribunal, which favoured the employer. The claimant appealed to the employment appeal tribunal which favoured the claimant.
The employer then appealed the case to the court of appeal whom rejected the schools argument.
This decision will impact every employer who currently uses the 12.07% holiday method, until now it has been practical within the education sector, but with the employment tribunal favouring Ms Brazel’s claim this could leave organisations open to be challenged.
For those with variable hours, the impact of the Brazel case is that in any situation where the 12.07% figure gives a different result to the averaging method, an employer will be liable for the difference.
Are you at risk?
If anyone in your supply chain is operating holiday at 12.07% for education workers (for those working fewer than 52 weeks) you need to be aware that you (agency or end client) could be liable to pay the difference should a case go to tribunal.
If you need any assistance with calculations get in touch with us on 01252 863700 or drop us a message here.