The Supreme Court’s recent judgment in the case of Harpur v Brazel [2022] has determined that workers who are on permanent contracts, but who only work for part of the year, are entitled to a minimum of 5.6 weeks’ holiday a year and their annual leave entitlement cannot be pro-rated on the basis of the weeks in the year when they are not required to work.
Under the Working Time Regulations 1998 (WTR) all workers are entitled to a minimum of 5.6 weeks’ holiday each year. There are express provisions which allow an employer to pro-rate this entitlement if the worker works part-time hours, however, there is no specific provision to pro-rate the entitlement if the individual is only required to work part of the year.
ACAS has previously recommended that when calculating holiday entitlement for workers with irregular hours, employers should ensure that workers accrue holiday at the rate of 12.07% of hours worked to ensure that they build up holiday entitlement in the same proportion to full-time workers.
In the recent case of Harpur v Brazel, the Court was asked to consider whether a teacher, Ms Brazel, with a continuing contract but who worked only certain weeks of the year, was entitled to 5.6 weeks’ paid annual leave. Her employer, Harpur Trust, argued that her leave entitlement should be calculated proportionately so the weeks in which she did not work reduced her paid annual leave. The Court found in favour of Ms Brazel and said that the idea of leave accruing over the year as and when hours are worked was inconsistent with the WTR and decided that annual leave taken by someone who works less than a full year can no longer be pro-rated to that of a colleague employed all year round.
The ruling rejects the 12.07% method of calculation and requires that workers who are engaged on a permanent contract for the whole year, but who are only required to work for part of the year (such as term-time only teachers or those on zero-hours contracts) should receive 5.6 weeks’ holiday with reference to their average earnings over 52 weeks.
The decision does not impact ‘classic’ part-time workers with set hours, whose holiday entitlement should still be calculated as a reduced number of days compared to a full-time worker.
It is important that employers ensure they are paying holiday pay correctly and update contracts and policies accordingly. If you require further advice on this issue, please contact our employment team on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.