Employment Law Case Update: Brazel v Harpur Trust
Ms Brazel was a visiting music teacher at a school run by the Harpur Trust. Employed under a zero hour’s contract, she worked mainly during school term-time, between 32 and 35 weeks a year. The contract provided for her to have 5.6 weeks' annual leave - her statutory entitlement.
The employer's case was that this statutory entitlement should be pro-rata for an employee working less than the standard 46.4 week working year, so holiday pay was based on the number of weeks actually worked. It contended that to do otherwise unfairly rewarded part-time workers. It asserted that it had paid Ms Brazel holiday pay of 12.07% of her annual earnings, which reflected the percentage which 5.6 weeks' statutory holiday bore to the standard working year.
Ms Brazel argued that the calculation should be based on s224 of the Employment Rights Act 1996, namely the worker's average earnings over a 12-week period immediately before holiday was taken. That approach would result in her, as a term-time only employee, receiving 17.5% of annual earnings as holiday pay. She argued that the statutory regime had a built-in mechanism which had regard to the fact that part-time workers worked fewer weeks, and that EU and domestic legislation was aimed at ensuring that part-time workers received "at least" as much as full-time workers. There was therefore no lawful basis for "writing down" clear and unambiguous provisions.
The Employment Tribunal (ET) originally found that there had been no unlawful deduction of wages as a result of the employer's application of the 12.07% calculation. It held that a principle of pro-rating should apply, and that the statutory scheme should be read down for part-time workers working fewer than 46.4 weeks per year, so that payment was capped at 12.07% of annualised hours.
The Employment Appeal Tribunal (EAT) disagreed, finding that there was no requirement in the Working Time Regulations 1998 to pro-rata holiday pay for part-time employees to ensure that full-time employees were not treated less favourably. Anomalies in the holiday pay calculation under section 224 of the Employment Rights Act 1996, which favoured workers who did not work throughout the year, did not justify words being read into the regulations or the statutory entitlement to holiday pay being capped at a percentage of the part-time worker's annual earnings. The EAT remitted the case to the ET.
Employers may wish to carry out a payroll audit to ensure they do not cap holiday pay at a percentage of the part-time worker's annualised hours. Workers with irregular hours (e.g. those on zero-hours contracts) should have their holiday pay calculated in accordance with section 224 of the Employment Rights Act 1996 (i.e. on the basis of the average weekly remuneration over the previous 12 complete weeks).
This article is from our weekly Employment Law Newsletter published on 12/04/2018. If you would like to receive this newsletter directly and be kept up to date with recent cases and Employment Law news, email email@example.com.
This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.