Zero-Hours worker wins holiday pay challenge at Supreme Court

In Harpur Trust v Brazel, the UK Supreme Court has opened the door to hundreds of thousands of claims for compensation from part-time and casual workers, ruling on 20 July 2022 that they are entitled to proportionately the same holiday pay as full-time workers.

The Supreme Court unanimously upheld a Court of Appeal ruling that music teacher, Lesley Brazel, a zero-hours employee who gets her leave paid out instead of taking holidays, should receive an average week’s pay for each week of statutory annual leave.

The decision rejects government advice previously used by employers of casual workers—including Brazel’s, The Harpur Trust—to prorate holiday pay at 12.07% of their wages for the hours they worked. This is the equivalent of dividing the value of holiday entitlements over the usual working year of 46.4 weeks.

That model leaves employees with irregular part-time hours out of pocket, the Supreme Court observed, confirming that pay given in lieu of holidays should be based on the statutory entitlement for full-time employment, regardless of how often the employee actually works.

Lady Rose said that the UK definition of a week’s pay for determining holiday pay is ‘a choice made by Parliament’.

‘The choice was that this should be calculated… ignoring weeks in which no pay is received’, she said. There is ‘nothing in the statutory language’ to suggest an alternative method should be used, Lady Rose added.

‘A slight favouring of workers with highly atypical working patterns is nothing so absurd as to justify the wholesale revision of the statutory scheme’, she said.

By dismissing the Harpur Trust’s claim to use the 12.07% standard, the Supreme Court has potentially created an avenue for seasonal, event and term-time workers to claim for historical underpayment.

Most UK workers are entitled to 5.6 weeks of paid holiday each year. They get four weeks under Directive 2003/88/EC, the Working Time Directive, and the rest under the Working Time Regulations 1998, SI 1998/1833, the domestic implementation of the EU legislation, which defines a week’s pay as an employee’s average pay over the 12 weeks before a period of leave.

However, because school holidays are longer than 5.6 weeks, Brazel was given three payments a year instead of annual leave. In 2011, the Harpur Trust changed how it calculated her holiday pay to align with the government guidance, sparking her lawsuit for unlawful deduction of wages.

The Employment Appeal Tribunal overturned the original employment tribunal’s method, which favoured the trust, saying in 2018 that there is no reason to depart from the ‘simple and straightforward’ calculation method outlined in the Employment Rights Act 1996.

The Court of Appeal supported this approach in 2019, ruling that, although it will produce ‘odd results in extreme cases’, this is balanced against the benefits employers gain from having employees rather than freelance contractors.

The Supreme Court shot down alternative methods of calculation put forward by the Harpur Trust that more closely reflect hours worked as ‘extremely complicated’ and out of step with European and UK law.

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