The issue for the Court of Appeal in The Harpur Trust v Brazel was how to calculate holiday entitlement for a permanent employee who only worked during term time. The employer argued that her holiday pay should reflect 12.07% of her normal earnings, to give effect to the pro-rata principle. The Court disagreed, finding that as a permanent employee she was entitled to 5.6 weeks' holiday, which should be paid in the usual way.

The employee was a music teacher who was employed to give individual music lessons to pupils on an "as needed" basis. As such she only worked during term time, although she was engaged under a permanent zero hours contract of employment. The school paid holiday pay at the end of each term, calculated by reference to 12.07% of the hours she had worked during the previous term. This reflected the proportion of holiday that a member of staff working throughout the year would receive.

Ms Brazel claimed that as a permanent member of staff, she was entitled to 5.6 weeks' holiday a year, paid at her average weekly rate, even though she only worked for between 32 and 35 weeks each year. The school disagreed, pointing out that her holiday would then represent 17.5% of her normal hours instead of the 12.07% available to a member of staff working throughout the year. Her complaint that the employer had breached the Working Time Regulations was rejected by the employment tribunal but upheld by the EAT. The employer appealed.

The Court of Appeal essentially had to decide whether holiday for a part-year worker has to be pro-rated to reflect their hours of work. It found that it does not. There is nothing in either EU or domestic law that requires the holiday entitlement of a part-year worker who is employed on a permanent contract to be pro-rated. Although on the face of it this was surprising, it was not an unprincipled or obviously unfair result and applying a pro-rata principle would lead to its own complexities.

The case is potentially relevant to any staff employed on zero hours contracts whose holiday pay is currently calculated by reference to 12.07% of their working hours, as recommended by ACAS guidance. The guidance will presumably now be revisited.