Holiday pay for term time only workers – practical implications

21st July 2022

Following the hearing in November 2021, we have now finally had the Judgment by the Supreme Court (SC) in the case of Harpur Trust v Brazel.

This case involved a visiting music teacher who worked term time only and she challenged the Trust’s method of calculating her holiday entitlement and pay.  Her basic argument was that she should be given the same holiday entitlement as an all-year-round worker.

The Working Time Regulations provide for 5.6 weeks’ paid holiday based on a week’s pay. The situation below only applies to the 5.6 weeks and not to any additional holidays that may be given to employees.

The Employment Tribunal found in favour of the Trust, the Employment Appeal Tribunal (EAT) found in favour of Ms Brazel and the Court of Appeal (CA) in 2019 agreed with the EAT.  The CA held that part year workers were still entitled to 5.6 weeks’ holiday even though this resulted in a disproportionately higher amount of holiday pay than all-year-round workers would have received.  The CA found that the calculating exercise should involve calculating a week’s pay and multiplying it by 5.6 weeks to give the amount of holiday pay.

The SC has now agreed with the Court of Appeal. Whilst acknowledging that this will have the effect of giving term-time employees a disproportionately higher amount of holidays compared to all year round workers, this did not warrant a rewriting of the statutory scheme.

The SC’s Judgment is the final judgment on this issue and the law is therefore that term time only workers should now be paid 5.6 weeks’ annual leave regardless of the proportion of the year they work.

What effect will this have on your School/Trust?

Prior to the Brazel case, the vast majority of schools, when calculating holiday pay for term-time only workers, did not pay 5.6 weeks’ annual leave.  Instead, the holiday pay was pro-rated down to reflect the weeks actually worked by the individual worker.

In our experience, following the CA decision, there was a variety of approaches taken by Schools and Academy Trusts.

Some introduced the 5.6 weeks’ pay with immediate effect and paid back pay, some changed the holiday entitlement going forward without back pay and some have waited for the judgment of the Supreme Court.

All Schools and Trusts will now need to amend (if they have not done so already) their holiday calculation for term time only staff.  This means that, for example, term time only workers who work 39 weeks during term time, are now entitled to have their pay calculated on the basis that they are actually working 44.6 weeks.  On average, this will mean approximately an extra week’s pay per year for term time only workers, more for independent schools where term time is often shorter.

Term time only workers who have not been paid the 5.6 weeks’ holiday pay will now have claims for unlawful deduction of wages, based on the incorrect calculation of holiday pay.

However, claims for unlawful deduction from wages have to be made within 3 months of the date of the last act complained of.  For those schools who amended the holiday pay entitlement following the Court of Appeal Judgment, future claims are likely to be out of time.

It is also important to note that any claim for unlawful deduction from wages can only go back two years.

We are aware of numerous Employment Tribunal claims that have been stayed pending the outcome of the SC and new claims are likely to be brought.

This is a generic overview of the implications. If you would like to discuss this further and identify your potential liability, please contact a member of our Education Team.

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