The recent Court of Appeal decision on holiday pay for part time, “part year” workers will put some part time employees in a more favourable position than full time employees when it comes to holiday pay. The impact of the case is unlikely to be as wide ranging as some press reports imply, as it only applies to permanent staff who work part of the year, most commonly those in academia, rather than part timers generally or casual staff who have no contract between assignments.
In Harper Trust v Brazel, Ms Brazel worked as a visiting music teacher at a school run by Harper Trust. She had a permanent contract on a zero hours basis and worked part time, during term time only with varying hours each week. The issue was that the Trust calculated her holiday pay by paying her 12.07% of her earnings at the end of each term, which complied with the ACAS guidance for casual staff, who have no permanent contract.
Ms Brazel successfully argued that this calculation bore no relationship to the actual calculation set out in the Working Time Regulations 1998 (WTR) for someone in her situation. The WTR requires the employer to take her average pay over a 12 week reference period. The CA found that under the WTR, an average of Ms Brazel’s earnings over a 12 weeks reference period should be the basis of the calculation, which results in more than a 12.07% payment.
This decision could prove costly for schools and universities that use permanent contracts for part time, part year workers and have capped their holiday payments to 12.07% of pay. The impact is reduced by the limits on making unlawful deductions from wages claims that can only be made in relation to the previous 2 years. Additionally, from next April holiday pay in this situation will be calculated over a 52 week reference period, which will reduce the impact of this decision. Some organisations may choose to see if the case is appealed to the Supreme Court before making any changes.