Part-Year Workers: Is Your Holiday Pay Being Calculated Correctly?

Do you work on a zero-hours, term-time only or part yearly basis (in other word you have a permanent contract but only work part of the year)? If so, a recent ruling by the UK Supreme Court on the calculation of holiday pay could affect you.

The Supreme Court was asked to consider whether Mrs Lily Brazel, a music teacher at Bedford Girl’s School, whose contract stipulated that she worked only certain weeks of the year, was entitled to 5.6 weeks’ of paid leave per year, the minimum amount of leave set out by the UK Working Time Directive. The Harpur Trust, which employed Mrs Brazel, argued that she wasn’t entitled to the leave and it should be pro-rated to account for the weeks not worked. The effect of this policy was that Mrs Brazel received less holiday pay.

The Supreme Court rejected all of the alternative methods of calculating holiday pay put forward by the Harpur Trust, a charity based in Bedford that promotes education through a number of independent schools. The Court said:

“The Harpur Trust also argue that the construction upheld by the Court of Appeal leads to an absurd result, that absurdity being that a worker in Mrs Brazel’s position (and in the position of some of the other hypothetical workers posited by the Harpur Trust) receives holiday pay which represents a higher proportion of her annual pay than full time or part time workers who work regular hours. We recognise, of course, that a construction which leads to an absurd result is, in general, unlikely to be what Parliament intended. However, we do not regard any slight favouring of workers with a highly atypical work pattern as being so absurd as to justify the wholesale revision of the statutory scheme which the Harpur Trust’s alternative methods require”.

In summary, part year employees should now be paid the full statutory minimum 5.6 weeks’ paid holiday entitlement per year and pay must be based on what is called the Calendar Week Method of averaging a week’s working hours (averaged over a 52-week period and using weeks where they actually worked).

The Department of Business, Energy and Industrial Strategy issued guidelines on holiday pay reflecting the Court of Appeal’s decision in the Brazel case, but we are aware that many employers chose to do nothing pending the outcome of the Supreme Court appeal.

If you’re on a zero-hours or part-year contract and think your employer is calculating your holiday pay wrongly, please contact the Union’s Advice Team on 01234 716005 (choose Option 1).