News & Views

Holiday Pay – Term Time Workers

SOC
BY Scott O'Connor
Employment law

Although it seems as though there has been a long line of cases clarifying the law on holiday pay, it is clear that there are many more grey areas being ironed out by the Courts, as seen from a recent decision handed down by the Court of Appeal in The Harpur Trust v Brazel.

In this case the Claimant was a music teacher, in permanent employment, working irregular hours.  At first instance and in the Employment Appeals Tribunal (EAT), the normal practice of calculating holiday pay at 12.07% was found to be incorrect. The Court of Appeal has now upheld this decision. It was held that the figure of 12.07% represented the 5.6 weeks’ annual leave a worker was entitled to.

However, the EAT previously had found this was not compliant with the Working Time Regulations 1998 (WTR) and that holiday pay should be calculated using the 12 week averaging method when calculating holiday pay for workers who have irregular working hours. This is because there is no provision in the WTR 1998 to pro-rata holiday pay.

The Court of Appeal also made reference to off-shore workers who, while employed all year round, are not working the whole year; defined as “part-year workers.” In this respect, holiday entitlement can be accrued in proportion to time worked; however, as we know from previous case law this is not mandatory and member states are able to provide more favourable annual leave entitlements.

Analysis

This finding could be potentially costly for employers; in this case, the Claimant received holiday pay of around 17.5% of annual pay rather than 12.07% . This was based on her 12-week average of hours worked.

As with all holiday pay case law, there is clarity on some aspects of the law, but some questions remain. Please contact your dedicated Employment Solicitor if you have any queries related to holiday pay which are keeping you awake at night!

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