A music teacher who was employed to work during term time, took her case to court after she claimed unlawful deduction of wages and breach of legislation. After several years, the long-awaited decision regarding the Harpur Trust v Brazel case has come in and our HR experts have broken down what this ruling means for sectors such as schools and for those who engage seasonal workers on a permanent contract.
This Supreme Court ruling cannot be appealed. It therefore settles the law in relation to the calculation of holiday pay for part-year workers on permanent contracts. It confirms that the old method, used by many employers, of calculating holiday pay for such workers by multiplying their wage by 12.07% is unlawful and must no longer be used.
Employers who use part-year employees and workers should ensure that they update their method of calculating their holiday pay going forward and seek advice on any backdated holiday pay that may be due. Backdated holiday claims are generally capped at two years back pay but we recognise that this is open to challenge. We are aware that the calculations can be complex, so our experts are on hand to help.
Although genuinely self-employed contractors are not entitled to holiday pay, employment status is frequently challenged, employers should also assess the risk of any of their contractors being found to be workers or employees as this could lead to additional liabilities.
*Note 1: This is not the same situation as part time workers working, for example, three days per week, where the regulations allow holiday entitlement can be prorated, but it does mean that part year workers will receive more generous holiday pay than other irregular hours workers.
*Note 2: Commentators suggest that a parliamentary intervention to change the law is unlikely.
If you would like to discuss the Harpur Trust v Brazel case in more detail or have a general query, please contact our HR Consultancy specialists. As well as advising their clients on the latest news such as this case, they can create custom solutions based on your situation such as specific day-to-day issues or more strategic projects.