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Holiday Entitlement (Brazel)

December 2022

Earlier this year, the Supreme Court reached a decision in the case of Harpur Trust v Brazel. This decision is likely to have a significant impact on organisations, especially educational institutions, that employ ‘part year’ employees on variable hours e.g. term time only employees or workers or zero hour workers. Following this decision, such workers may be entitled to more annual leave. 

The scope of this ruling does not affect the use of the accrual method of holiday pay entitlement for full time workers, part time workers who are paid an even amount throughout the year, or employees engaged on short, fixed term contracts.

The background

This case involved a music teacher, Ms Brazel, who was employed on a permanent, zero-hours, term-time contract. She was required to work during term-time only and her hours varied depending on pupil needs. Ms Brazel had to take her holiday outside term time and the amount of holiday she was given was calculated using the percentage method: the school calculated 12.07% of her hours each term and paid her at her hourly rate for those hours in the subsequent holiday period.

Ms Brazel argued that this was not correct and said that she was entitled to payment for 5.6 weeks’ holiday in accordance with the legal rules for workers with no normal hours of work. She said that her holiday pay should be based on her average pay during working weeks and that the 12.07% method had no basis in law. 

The decision

The Employment Tribunal dismissed Ms Brazel’s claim, but the Employment Appeal Tribunal, Court of Appeal and the Supreme Court all agreed with Ms Brazel. 

What does this mean for employers?

This decision means that the use of 12.07% of an employee’s hours (the percentage method) should not be used to calculate holiday. Previously, ACAS guidance recommended that casual workers should accrue statutory holiday entitlement at the rate of 12.07% of hours worked but this guidance has now been withdrawn 

All employees should have their holiday pay calculated based on their average earnings over the previous 52 working weeks and all employees will receive 5.6 weeks’ leave. This ruling could have a particular impact on the education sector where it is standard practice to employ term time only staff who, although they are under contract for a full year, will only work for a few weeks on variable hours around exam times, such as exam invigilators or music teachers. The Harpur Trust v Brazel ruling means that even if an employee works just one week in a year, they would still be entitled to 5.6 weeks of paid holiday at the same rate of pay as the one week that was worked.

The Term-time, Annualised Hours and Compressed Hours Employment Contract templates have all been updated to reflect this change.  A new Alteration Letter concerning the change to holiday calculations is also available to send to relevant employees. 

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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