Skip to main content

News story

October 31, 2019

Holiday pay ruling hit schools and colleges

A case heard by the Court of Appeal earlier this year will affect many in the education sector; holiday pay for workers, who only work part of the year and have no contractually set hours, should not be calculated on a pro-rata basis.

In the case of The Harper Trust v Brazel, the Court of Appeal has ruled that part-year workers on a permanent contract but with no set hours are entitled to have their statutory holiday pay calculated on the basis of their average earnings over the previous 12-week period before taking leave.

Many employers use a pro-rata calculation of annual pay to work out holiday pay for part-year workers without normal working hours. This ruling likely means that higher holiday pay payments are due to part-year workers with no set hours, and employers risk claims for unlawful deductions where pro-rata calculations have previously been made.

The case was brought by music teacher Lesley Brazel, who worked on a permanent employment contract during term time at a school but was paid only for the hours she worked. These varied from term to term, depending on how many children were taking music lessons. Under the terms of her contract, she was entitled to holiday leave of 5.6 weeks (in line with the statutory entitlement) and was required to take that holiday out of term time.

Under the Working Time Regulations 1998 (WTRs), annual leave should be calculated at the rate of a week’s pay for each week of leave.

For Ms Bezel, holiday pay was calculated by multiplying her pay for the hours she worked each term by 12.07 per cent, a commonly used set percentage to calculate holiday entitlement for those with irregular working hours and as set out in the ACAS guide to holidays and pay.

The Court of Appeal has said there is no reason to pro-rata entitlement in this way, as the WTRs state that holiday pay should be calculated in accordance with the “week’s pay provisions” of the Employment Rights Act 1996 (ERA).

Under the ERA’s provisions, where a worker does not have normal working hours, holiday pay should be taken to be the worker’s average weekly pay in the 12 weeks before leave starts (excluding any weeks in which no remuneration was payable).

Employment partner, Karen Cole, said:

“Holiday pay can be a real minefield for employers, but this ruling is clear on the treatment of part-year permanent contracts. Employers who engage workers on a permanent basis for part of the year, which may include zero-hour arrangements, should check their approach to holiday pay calculations to ensure they get it right going forwards.

Employers should also be aware that workers may bring a claim to recover underpayments for the previous two-year period presented as an unlawful deduction from wages claim. It is, therefore, vital they check records retrospectively.”

Contact Karen Cole today for information on holiday pay or other employment matters.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Stay in touch

Subscribe to our newsletter

Stay in touch

By completing your details and submitting this form you confirm you are happy for us to send you marketing communications and that you agree to our Website Privacy Policy and Legal Notice and to us using Mailchimp to process your data.


Sending

News/Insight

  • Supporting neurodiverse people in family law matters
    Understanding neurodiversity in the legal context.


    Read more
  • Supreme court ruling on referees’ employment status
    In PGMOL v HMRC, the Supreme Court considered whether professional referees were self-employed. The case has the potential for far-reaching implications across the employment world.


    Read more
  • Business First Magazine
    Read our expert insights on key workplace and corporate issues.


    Read more
  • Why is clear contract drafting important?
    How simple contract clauses can protect your business.


    Read more
  • Ensuring equality: A legal guide to responsibilities and compliance
    Understanding equal opportunities in the workplace


    Read more

What they say...

  • Anon, April 2025
    “Whistleblowing dismissal claim and settlement negotiations I can not speak highly enough of this firm and [Patrick Simpson], they were not only understanding of my case needs they also worked with the up most integrity and professionalism to e

  • Patrick, April 2025
    “We had a long process handled by Charlotte & James from RIAA Barker Gillette. Even though we were outside the UK Charlotte & James we’re always available and we developed a great working relationship with them.They gave sound advice,

  • Leann Paris, March 2025
    “From the beginning to the end, the support we have received throughout the case with all the staff members has been far more than we expected, we got kept up to date with every single matter, I have had stressful few years but Charlotte and he

  • C Smith, March 2025
    “As executor of a will it was a relief for a solicitor to act on my behalf as though no disputes it was still a lengthy and complex process. It was dealt with mostly by Charlotte B. who kept me informed at all times. She explained the process c

  • Marc, March 2025
    “RIAA Barker Gillette were engaged to handle a real estate transaction with unusual circumstances. As a non-UK resident unfamiliar with English conveyancing procedures, I felt completely satisfied with the depth of the information and explanati

Read more
Send this to a friend