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Holiday Pay

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Should holiday pay for a term-time worker with a year-round contract (a ‘part-year worker’) be calculated as 12.07% of their annual earnings?

No, held the Supreme Court in Harpur Trust v Brazel.

The Claimant works as a music teacher during term-time but her contract extends throughout the year. She is hourly paid and works variable hours. All workers are entitled to 5.6 weeks annual leave and the Claimant’s contract stipulates that this is to be taken during school holidays.

In 2011, the Respondent changed its method of calculating holiday pay for the Claimant, from an average of the previous 12 weeks’ earnings multiplied by 5.6 weeks, to 12.07% of termly earnings. This worked out as less money for the Claimant and so she brought an unlawful deduction from wages claim.

The Claimant initially lost in the tribunal, but that was overturned by the EAT. The Court of Appeal, and the Supreme Court, agreed.

Rejecting the Respondent’s arguments and suggested methods of calculation, the Supreme Court noted that nothing in the Part-Time Workers Regulations prohibited part-time workers from being treated more favourably than someone working throughout the year.

The correct method of calculation of weekly pay for a ‘part-year worker’ is as set out in s224 Employment Rights Act 1996. Weekly pay should be calculated as an average of the most recent 12 weeks’ of earnings, ignoring any weeks where earnings were zero (e.g. school holidays in this case).