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The thorny issue of holiday pay for part-time term-time workers

The issue of how to calculate statutory holiday pay for part-time term-time workers has recently been considered by the Employment Appeal Tribunal with surprising results.

Different employers take different approaches. In the case of Brazel v The Harpur Trust, the school capped holiday pay for such workers at 12.07% of the hours worked in the preceding term. In doing so, it relied on Acas guidance which states that the statutory holiday entitlement of 5.6 weeks equates to 12.07% of hours worked over the course of a year. However, the EAT decided that this approach was wrong. Instead, they held that it is, in fact, a very simple question based on the application of the calculation of a “week’s pay” under the Employment Rights Act 1996 (“ERA”).

Workers are entitled to 5.6 weeks’ holiday per annum under the Working Time Regulations 1998 (“WTR”). The WTR states that a worker is entitled to be paid at the rate of a week’s pay in respect of each week of leave. A week’s pay is calculated, in accordance with the ERA, by averaging out the employee’s weekly pay over the last 12 weeks in which the employee worked and discounting any weeks where no work was performed. The WTR does not suggest that the calculation should then be pro-rated according to the amount of time actually worked.

To understand this in context, the case involved a peripatetic music teacher. She worked during term time under a zero-hours contract. Her weekly working hours fluctuated. She was required to take her holiday during school holidays and was paid her holiday in April, August and December.

The teacher’s holiday pay was calculated by the school by pro-rating the statutory 5.6 weeks’ holiday pay on the basis that the teacher only worked term-time (and so was typically only working 32 weeks a year). This meant that the teacher’s holiday pay was less than workers who worked a standard 46.4 week working year.

However, this calculation does not comply with the WTR. As determined by the EAT in this case, a worker with irregular hours should always be given a full entitlement of 5.6 weeks’ holiday pay, and then paid on the basis of their weekly pay averaged over the last 12 weeks in which they worked. This means that term-time only employees will receive the same amount of holiday pay as those who work all year round. This is because weeks when a worker was not working (i.e. the school/college/university holidays) do not count in the 12-week averaging period.

This result appears to be unfair, as term-time only workers will be paid a similar amount of holiday pay across the year as those who work across the whole year; the term-time workers will therefore effectively receive a “windfall”. However, the EAT was not troubled by this: it pointed out that the purpose of the Part-Time Workers Regulations 2000 is to prevent part-time workers from being treated less favourably than full-time workers, but that there is no principle to the opposite effect. In other words, there is no legal recourse for a full-time worker who is treated less favourably than a part-time worker.

This case will be particularly relevant for workers in the education sector who are only entitled to statutory holiday pay. Contractual holiday pay (i.e. holiday pay in excess of the statutory entitlement of 5.6 weeks) can be paid on whatever terms the employer may choose, provided that there is no discrimination against part-time workers.

For further help or advice, please contact Employment Law Partner, Louise Connacher, on 0113 2802108 or louise.connacher@luptonfawcett.law

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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