Calculating Holiday Pay for Term Time Workers

In Brazel v Harpur Trust (UKEAT/0102/17), the Employment Appeal Tribunal (EAT) has held that holiday pay for a zero hours term-time only worker cannot be capped at 12.07% of annual earnings

The school calculated holiday pay pro rata to the proportion of the year worked, paying 12.07% of a term’s pay (i.e. 5.6 weeks’ holiday divided by the standard working year of 46.4 weeks).

The EAT held that this approach was wrong as on a working ‘year’ of 32-35 weeks, the effect of this was that holiday pay came out lower than if calculated on the basis set out in s224 ERA, taking a 12-week average of pay from weeks actually worked, and ignoring the out-of-term weeks.

The EAT held that basing holiday pay on the 12-week average was the correct approach.

The effect of the 12-week average approach is that holiday pay as a percentage of annual earnings for a part-timer on a 32-week ‘year’ would be 46.4/32 x 12.07% = 17.5%, giving proportionately more holiday pay than a worker working throughout the year getting 5.6 weeks paid leave.

The EAT noted that part-timers are entitled to be treated no less favourably than full-time workers although noted that this judgment would be of importance for schools and other educational establishments, as well as employers who pay rolled-up holiday pay to employees with no set working hours.