In July 2022, the Supreme Court issued its long-awaited judgment in the case of Harpur Trust v Brazel. Mrs Brazel was a visiting music teacher, employed by Harpur Trust, to work variable hours for an hourly rate of pay.
At the end of each term, the Trust calculated the holiday pay owed to her by reference to 12.07% of the salary she had earned that term. Mrs Brazel argued that this was the incorrect method of calculation and amounted to unlawful pro-rating of her holiday entitlement.
The Supreme Court agreed with her, and ruled that every worker is entitled to the statutory minimum holiday entitlement of 5.6 weeks per year, regardless of how many weeks are worked during the year, and that workers whose salary varies throughout the year must be paid at the average weekly rate of pay over the previous 52 weeks in which salary was payable. Crucially, the Supreme Court clarified that when undertaking this 52-week calculation, any weeks in which no remuneration was payable should not be taken into account.
The impact of the Harpur Trust decision on schools
The Supreme Court’s decision has resulted in significant upheaval at many schools, since it was common practice to pro-rate the holiday entitlement of part-year workers and to use the 12.07% method to calculate holiday pay.
Schools have found that their efforts to comply with the Harpur Trust decision have resulted in some bizarre scenarios, whereby their part-year workers receive a greater holiday entitlement than their part-time counterparts who are working the same number of hours across the year. There have even been cases of exam invigilators and sports coaches being entitled to more holiday pay than the amount of their annual salary.
In an attempt to rectify these anomalies, the Government last week launched a previously unannounced and unexpected consultation. The Government has stated that it wishes to “ensure that holiday pay and entitlement received by workers is proportionate to the time they spend working” and that it is therefore “seeking views on proposals to pro-rata holiday entitlement for part-year and irregular hours workers based on the annual hours they work”.
In particular, it is notable that the Government is asking for views on a return to the use of the 12.07% calculation method, and the use of a 52-week reference period that takes into account weeks in which no remuneration is payable.
What this means for schools
For the time being, the Supreme Court’s judgment remains binding law and will continue to be so unless the Government decides to legislate to overturn the judgment once it has considered the responses to the consultation. Those schools that have already made changes in order to comply with the Supreme Court’s decision are therefore compliant with the current law.
Those schools that are not compliant with the Supreme Court’s decision should be mindful of the risks associated with non-compliance. However, they may nevertheless wish to hold off from making the necessary changes and instead adopt a “wait and see” approach until the Government has indicated whether it intends to bring in legislation to change the law.
The consultation can be accessed here
We would urge all schools to respond to the consultation with their views on the proposals, as this is a chance to overturn some of the anomalies brought about by the Supreme Court’s decision and to restore a sense of equality. The consultation closes on 9 March 2023.