The Court of Appeal has upheld a ruling that a teacher’s holiday was wrongly calculated, in a ruling that has been described as a victory for part-time workers.
The court ruled that L Brazel, who works as a visiting music teacher for Bedford Girls’ School, should have her holiday pay decided on her earnings over a 12-week reference period. Her employer had argued the standard way to determine holiday pay was on a pro-rata basis.
Union Unison said the ruling was a victory for “hundreds of thousands” of employees working part-time or irregular hours.
Unison – which intervened even though Brazel was not a member – said the judgment clarified that all employees were entitled to statutory minimum annual leave even if they did not work for part of the year or worked irregular hours.
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Brazel is employed by the Harpur Trust, which runs Bedford Girls’ School, and the tribunal noted that she was considered a “valued member of staff”.
As a visiting music teacher, Brazel essentially held a zero-hours contract as she did not have a set number of hours, and the hours she worked were decided at the start of each school term depending on the number of pupils wanting tuition. She also did not work during holidays, but was nonetheless employed under a permanent contract.
Because of this, the judge described her as a ‘part year’ worker.
Using the method recommended by Acas for casual workers, the trust had been calculating Brazel’s holiday as being the equivalent of 12.07 per cent of hours worked – calculated by dividing the number of working weeks by the statutory 5.6 weeks’ entitlement.
However, Brazel argued that the Working Time Directive (WTD) dictated that holiday pay should be calculated by taking a week’s pay – an average of weekly remuneration for the 12 weeks before the calculation date – and multiplying that by 5.6. The judge noted there was nothing in the provisions that required a different approach to be taken if a worker did not work a full year.
Brazel initially complained through the trust’s grievance procedures; however, she was unsuccessful and in March 2015 took a complaint to an employment tribunal. This was dismissed in 2017 on the grounds that the pro-rated rate of 12.07 per cent of average pay or hours worked would have given Brazel proportionately the same holiday pay entitlement as a full-year worker.
Brazel then appealed to the Employment Appeal Tribunal, which upheld the appeal as it said there were no grounds for deviating from the rules set out in the WTD.
This was challenged by the trust, which argued that pro-rating holiday pay was both stipulated in law and constituted common practice, but the Court of Appeal dismissed this appeal.
Lord Justice Underhill, while accepting that European case law established that the WTD required only that workers should accrue entitlement to paid annual leave in proportion to the time they had worked, said there was no requirement to pro rata the entitlement of ‘part year’ workers to that of ‘full year’ workers.
Underhill said: “On any natural construction, the [Working Time Rules] make no provision for pro-rating. They simply require, as the claimant says, the straightforward exercise of identifying a week’s pay in accordance with the provisions of sections 221-224 and multiplying that figure by 5.6.
“It does not seem to me particularly inequitable that employers that choose to retain on permanent contracts workers whom they could have engaged freelance, because doing so has particular advantages, should have to accept the additional costs that come with that choice.”
Commenting on the case, Emma Bartlett, partner at Charles Russell Speechlys, said it was relevant to employers that hire workers with subsisting contracts between assignments – such as academics – rather than part-time workers more generally.
“Employers that employ part-year workers will want to calculate whether they have been responsible for any underpayments if they adopted the wrong approach to holiday pay calculations,” Bartlett said.
“These employers will need to consider whether to make back payments or otherwise reserve against claims for underpayment of holiday pay [and] will also need to consider whether employment contracts need to be revised to correct any references to holiday pay calculations for term-time or part-year workers.”
However, Bartlett added that employers may wish to see if the case is progressed to the Supreme Court before acting.
In a statement, the Harpur Trust said: “The practice of pro-rating holiday entitlement for staff who only work for part of the year was widely understood to be correct and, in line with the approach recommended by [Acas] in their guidance, it has been applied nationally in many industries and sectors.
“As has been acknowledged throughout this case, the application of the relevant legislation to employees who work part of the year has been unclear. Given the highly technical nature of this issue, it has had to be determined by the courts and further appeal may be made to the Supreme Court.
“The Harpur Trust values all its staff and will ensure that they receive pay and benefits in line with any changes to legal requirements when this issue is finally determined.”