Calculating holiday pay for workers who do irregular hours can be daunting enough, but recent reporting by some publications of the recent Employment Appeal Tribunal decision in the case of Brazel v The Harpur Trust (UKEAT/0102/17) has left many scratching their heads as to the practical implications. In an attempt to make things a little clearer, here is a potted summary of the case and its practical implications.
The claimant in this case was a visiting music teacher on a zero hour contract with a contractual holiday entitlement of 5.6 weeks. Due to the nature of her position, she worked mainly during term time and so, in effort to pay her in a manner which the Respondent considered to be fair and commensurate to those members of staff with more regular hours, she was paid on the basis of 12.07% of her annual pay (her holiday weeks being paid as a proportion of the working weeks in a year, i.e. 5.6 ÷ 46.4).
The EAT held that in doing so the Respondent had applied the wrong calculation and that that the calculation of holiday pay for workers with irregular hours, such as those on zero hour contracts, should be paid using the straightforward application of section 224 of the Employment Rights Act 1996, i.e. on the basis of the average weekly pay over the previous 12 complete weeks.
Whilst strict application of section 224 may give rise to some anomalies, e.g. favouring a person who does not work throughout the year, the EAT found that this did not justify words being read into the Working Time Regulations 1998 or the worker’s holiday entitlement being pro-rated as in this case. Whilst there are EU and UK provisions to ensure that part time workers are not treated less favourably than full-time workers, there is no such principle to ensure that full-time employees are not treated less favourably than part-time workers.
So, in practical terms, what do employers need to do?
Cheryl Moolenschot, Litigation Consultant at EML, comments…
Well, if using a different system for calculating the holiday pay of workers with irregular hours, they should change over to the statutory methodology (i.e. average weekly pay over the previous 12 complete weeks) and consider whether an amendment to contractual documentation is necessary.