Earlier this week the Supreme Court issued its decision in Harpur Trust v Brazel (2022), it is a decision that union representatives will want to be aware of especially where members work on term time, seasonal, or part time contracts.
The Working Time Regulations (WTR), which is derived from EU law (when the UK was EU member) but is legislation but enacted by Parliament and continues to be in force despite Brexit provides for all workers to receive 5.6 weeks’ leave a year, and for that leave to be paid. For those working regular hours every week on a full time basis that is a pretty straightforward right. The pay a worker receives during the holiday period is based on the the average twelve week’s pay. Where a worker (as was the case here) does not work every week then that week is disregarded when calculating the average pay for the past week under section 224 of the Employment Rights Act 1996 (ERA; for example, by counting back beyond the set number of calendar weeks until there are twelve actual weeks worked). Correction note: since April 2020 the reference period is fifty two weeks, not twelve (thank you for the alert reader who highlighted my mistake). The twelve week period applied for the claimant but the law now requires fifty two weeks.
Harpur v Brazel concerned a visiting music teacher at a school, who was no guaranteed any hours (she was on a zero hours contract) but worked on average between 32 and 35 weeks. In common with all teachers her holidays were taken during school holidays.
The central issue for the case was one of holiday pay and concerned how much holiday pay employer was obliged to pay under the WTR and whether, as a part time worker she was entitled to the very same 5.6 weeks paid holiday under the WTR that a full time worker would receive.
In 2011 ACAS issued advice to employers, catastrophically bad advice as it turned out, that recommended employers should adopt a formula to calculate the holiday pay part year workers should receive. The result was that the employer calculated the average salary received during the relevant period and then multiplied that by 12.07%. So where did this rather precise figure come from? The UKSC’s judgment explains how ACAS advice bore on the Harpur Trust’s decision (at paragraph):
Harpur Trust calculated Mrs Brazel’s hours worked at the end of each [school] term, took 12.07% of that figure and paid her the hourly rate for that number of hours. We will call this “the Percentage Method”. The Harpur Trust say that in calculating her leave entitlement in that way, they were following the method recommended by Acas in its guidance booklet Holidays and Holiday Pay for calculating the pay of casual workers. The relevant passage in the booklet states that if a member of staff works on a casual basis or very irregular hours it is “often easiest” to calculate holiday entitlement that accrues as hours are worked. 12.07% is the proportion that 5.6 weeks of annual leave bears to the total working year. The working year is the whole year (52 weeks) minus the annual leave (5.6 weeks) and so 46.4 weeks. 5.6 weeks is 12.07% of 46.4 weeks. The Harpur Trust therefore treated Mrs Brazel as entitled to 12.07% of her total pay for the term.
The effect of the employer’s approach is that the holiday pay was pro-rated. A permanent full time worker would receive holiday pay for 5.6 weeks under the WTR (based on the 46.4 working weeks in the years. Because the claimant did not work 46.4 weeks she was not paid holiday for the full 5.6 weeks but the proportion of that 5.6 weeks correlating to the percentage of a full time worker’s work completed. So, to take a simple example, if a teacher on a zero hour contract worked for 23.2 weeks in the year (exactly half of the 46.4 weeks of a full time contract) then they would be only receive holiday pay equalling 2.8 weeks a year (being 50% of 5.6 weeks).
The legal argument involved the relevance of EU law to the interpretation of UK legislation (the WTR). In the event, the Supreme Court gave a very clear steer that UK law (not EU) as set out in the WTR gave every worker without distinction based on their working pattern a right to 5.6 weeks paid leave .
This is the headline finding of the court: whether or not a worker is a term time worker, part time worker, seasonal worker they are entitled to 5.6 weeks paid holiday, and that figure is not reduced on a pro-rata basis. Or, as the UKSC put it themselves (paragraph 79): “[i]n short, the amount of leave to which a part-year worker under a permanent contract is entitled is not required by EU law to be, and under domestic law is not, prorated to that of a full-time worker.” Of course, given the base average salary zero hour workers (and similar) is likely (though not necessarily, given the approach of s.224 ERA) to be higher then the actual pay received is likely to be less, but it must still reflect the full 5.6 weeks in all circumstances.
Harpur v Brazel is an important decision for workers. I hope to follow up shortly with a post on the practical implications of the decision but suffice to say it is one every worker who works irregular hours especially in seasonal and term time work – what is sometimes called atypical work – should be alert to whether there remuneration has been calculated. Given the approach adopted by the Harpur Trust was recommended to UK employers by ACAS has now found unlawful it is very likely there a sizeable number of other workers who will be affected and their legal right to back pay strengthened by the decision.
Another important aspect of the case of relevance to trade unionists is the role Unison played in intervening in the case (which they did at EAT and Court of Appeal stages too) which is one of a number of crucial interventions by Unison on workers’ rights before senior courts.
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