The Court of Appeal recently ruled in the Brazel v The Harpur Trust case that holiday pay for ‘term time’ workers should be calculated using their average earnings over a 12 week period and not-pro-rated.
Mrs Brazel was a visiting music teacher employed by The Harpur Trust on a zero-hours contract. Mrs Brazel argued that the holiday pay calculation used by the Trust based on the 12.07% calculation did not comply with the working time regulations and produced a lower figure and that her holiday pay should be calculated using a 12 weeks average. Mrs Brazel’s weekly working hours were around 32 hours. She argued that her holiday pay should be calculated by taking the weekly average of the 12 weeks prior to the date of the calculation and multiplying it be 5.6. By calculating her holiday in this way her holiday pay equated to approximately 17.5% of her annual pay, higher than the 12.07% of annual pay for her full-time colleagues.
The impact of this ruling means that now in terms of how a term-time only worker’s holiday pay should be calculated, the employer will need to work out the average number of hours worked per working day during the previous 12 working weeks (disregarding any weeks during which the worker was not paid anything). To work out a day’s holiday pay, the employer should then multiple this figure by the worker’s normal hourly earnings.
A perhaps unintended consequence of the WTR formula therefore is that it can favour term-time staff by affording them the same holiday pay as those who work all year round. This is because the 12-week reference period disregards the weeks during which the worker has not been paid anything, meaning that they will still be entitled to 5.6 weeks’ pay despite working fewer hours annually.
Care should be taken when calculating holiday pay and a reminder that the reference period for calculating holiday pay will change from 12 weeks to 52 weeks on 6 April 2020.
If you would like further guidance or support on this matter or require advice on other people management matters please contact Clover HR on 0121 516 0299 or email us at firstname.lastname@example.org
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