Summary 

Our September update considers recent key developments in employment law, including a case on calculating holiday pay for irregular workers and a Supreme Court decision on non-party access to court documents. We also outline other points of note, including developments relating to non-disclosure agreements and gender pay gap reporting.

Calculating holiday pay for part-year workers

The Court of Appeal has confirmed that ‘part-year workers’ – that is, permanent workers who are employed all year round but who only work for part of the year and who are only paid for the irregular hours they work – should not have their holiday pay pro-rated compared to a full-year worker.

On the facts of this particular case, the claimant was employed as a visiting music teacher on a zero hours contract working irregular hours during term time only. The employer had calculated her holiday pay as 12.07% of her earnings. This is the typical method used for calculating holiday pay for casual workers – that is workers who are not retained under contract between periods of work.

However, the Court of Appeal said that a part-year worker such as the claimant was entitled to holiday pay calculated by reference to her average hours worked over a 12 week reference period. Using this formula, her holiday pay amounted to around 17.5% of her annual pay, rather than 12.07% that would have applied had she worked throughout the entire year. This means that workers who only work for part of a year under a permanent contract could well receive a higher proportion of their annual earnings as holiday pay than full-time workers.

Why this matters?

This case is particularly significant because it has traditionally been common practice to calculate holiday pay for all workers with irregular hours using the 12.07% figure – an approach that had been supported by ACAS guidance and was reflected in the government’s holiday pay calculator. Employers using the 12.07% formula to part-year workers

Subject to any appeal of this decision, this case highlights the difficulties employers can have with working out the appropriate rate of holiday pay for part-year workers. It is important to note, however, that the Court of Appeal stressed that its analysis focused on casual workers who are employed on a permanent (ongoing) contract, rather than casual workers who enter into a new contract with their employer each time they are engaged to do work.

Harpur Trust v Brazel

Supreme Court rules on non-parties’ right of access to documents in proceedings

The Supreme Court has recently provided guidance on the circumstances in which a non-party has a right to obtain documents from court proceedings and has clarified the legal bases upon which such a request may be made.

The Supreme Court has confirmed that in accordance with the principle of open justice, the starting point is a presumption that the public have a right of access to documents. This includes submissions made in the proceedings and also documents which have gone before the court or have been referred to in the proceedings.

However, non-party applicants need to explain why they want access to the documents and how such access will advance the principle of open justice. The court will then need to conduct a fact-specific balancing exercise between the principle of open justice and the potential value of the information against the risk of harm that disclosure may bring to the judicial process or the interests of others. There are, however, a number of circumstances in which access could be denied by the court, for example where there’s a need to protect privacy interests, trade secrets or commercial confidentiality.

Why this matters?

This decision may result in an increase in applications made by non-parties to access documents, particularly where third parties are contemplating bringing their own proceedings against one of the parties to existing litigation and are seeking to use the disclosed information to support their case. In such instances, the non-party seeking access to documents will be required to pay the reasonable costs of obtaining access.

Cape Intermediate Holdings Ltd v Dring (for and on behalf of Asbestos Victims Support Groups Forum UK)

Round up of other developments

Non-disclosure agreements (NDAs): The Law Society has released a brief NDA guidance leaflet for the public to help them understand their rights when faced with an NDA, including the ways in which NDAs should be limited, and encouraging individuals to seek independent legal advice before signing an NDA.

Gender pay gap reporting: the Equality and Human Rights Commission (EHRC) has announced that the six companies who failed to report their gender pay gap when required to do so in April this year have all now reported their figures and have entered into formal agreements with the EHRC to meet their reporting requirements for the next five years.