· Comment

In what circumstances should a worker’s right to paid holiday be pro-rated?

The Supreme Court is considering in what circumstances a worker’s right to paid holiday should be pro-rated. In Harpur Trust vs Brazel, a music teacher engaged to work during term time only (a 'part-year worker') is challenging her employer’s method of calculating holiday pay.

Harpur Trust, her employer, calculates her holiday pay by multiplying Brazel’s earnings each term by 12.07%.

Brazel claims that, as a worker within the meaning of the Working Time Regulations 1998 she is entitled to 5.6 weeks' paid holiday, the same as if she worked throughout the year.

The Court of Appeal agreed with her; however, Harpur Trust has appealed that decision to the Supreme Court, arguing that it is appropriate to pro-rate Brazel’s holiday pay to reflect the fact that she only works for part of the year.

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It is an interesting case and its impact could be far reaching. If the Supreme Court upholds the principle that part-year workers are entitled to 5.6 weeks’ paid holiday without pro-rating, it produces a number of anomalous scenarios.

Firstly, it is accepted that the holiday entitlement of 'part-time workers', those who work reduced weekly hours but throughout the year, should be pro-rated according to their reduced hours.

For example, a worker who works three days per week throughout the year (i.e. 60%), is entitled to 60% of the holiday entitlement of a full-time worker.

However, following the Court of Appeal’s decision in this case, a part-year worker who works full-time, albeit for only 60% of the year, would be entitled to 100% of the paid holiday entitlement of a full-time worker who works throughout the year.

In both examples, the employer gets the same benefit (60% output) but the working arrangements determine the workers’ entitlement to paid leave. The decision could, therefore, produce windfalls for workers who are employed to work for only short periods each year.

In extreme cases, a worker could be entitled to more paid holiday each year than the amount of work which they are required to do (providing they are engaged on a permanent contract).

Although the Supreme Court is only considering the holiday pay of part-year workers, Harpur Trust’s method of calculating holiday pay is routinely used in a number of other employment situations.

For example, it is common place for agency workers and for those engaged on short-term contracts to have their holiday pay calculated in this way, by rolling up. For this reason, the ramifications of the decision could be extensive.

Hannah Ford is partner and Sarah Taylor is senior associate at Stevens & Bolton