Landmark Appeal Court ruling on holiday pay

29 August 2019

The public service union Unison has described a Court of Appeal ruling in a case concerning a music teacher's holiday pay as a landmark decision which has implications for hundreds of thousands of employees.

It was referring to Harpur Trust v Lesley Brazel & Unison.

The union intervened in this appeal, which was being defended by music teacher Mrs Lesley Brazel and brought by Harpur Trust, her term-time employer. The Trust claimed she was entitled to leave and pay below the statutory minimum.

Unison general secretary Dave Prentis said: “Unison intervened because this case was about all workers being treated fairly and would have an impact across the whole of the UK.”

At issue was how Mrs Brazel’s payments in respect of annual leave pursuant to the Working Time Regulations (WTR) should be calculated.

The original Employment Tribunal adopted a method more favourable to the Trust, but on appeal the Employment Appeal Tribunal (EAT) substituted a method more favourable to the claimant.

Unison said that the Appeal Court decision has now clarified the legal position, ensuring that all workers are entitled to a minimum of 28 days paid annual leave, even if they do not get given work or are not paid for parts of the year.

In addition, this leave must be paid at the rate of a normal week’s pay, or based on the average payment for the preceding 12 weeks if pay is irregular.

The Appeal Court decided that the essential difference between the parties is whether the calculation of Mrs Brazel's holiday entitlement or holiday pay should be pro-rated to that of a full-year worker in order to reflect the fact that she did not work throughout the year.

In fact, she works about 10–15 hours a week during term-time and the school, working on the principle of pro-rating, had calculated her holiday pay as a percentage of yearly hours worked.

The Court has decided that it should be based on her average weekly pay over a 12-week term.

Unison legal officer Shantha David said: “The Government’s failure to provide guidance in this area has left workers in limbo. The courts have once again had to step in to stop the abuse of workers and to fix what legislation should have made clear from the outset.”

Comment from BrightHR CEO and HR expert Alan Price

In truth, the Court’s decision on calculating holiday pay should change very little for employers with staff who work varied hours, as a day’s rate of holiday pay in these scenarios has always been calculated by taking the employee’s average pay over the previous 12 weeks.

However, this decision does highlight the general sense of confusion when it comes to working out an individual’s holiday entitlement when their hours vary.

Although the Court has said the previous method of using 12.07% of an employee’s annual working time to calculate entitlement is incorrect, it is yet to confirm a more preferable method.

Therefore, as employers wait with bated breath, there is always the concern that ongoing practices may be deemed unlawful in the future.