Holiday pay guidance updated for term-time workers

06 September 2019

The Department for Business, Energy and Industrial Strategy (BEIS) has updated its holiday pay guidance to reflect the ruling in the Employment Appeal Tribunal case of Brazel v Harpur Trust.

 

Background 

The Court of Appeal ruled that Brazel, who works as a visiting music teacher for a Girls’ School, should have her holiday pay decided on her earnings over a 12-week reference period. Her employer had argued the standard way to determine holiday pay was on a pro-rata basis. Using the method recommended by Acas for casual workers, Harpur Trust had been calculating Brazel’s holiday as being the equivalent of 12.07% of annual hours worked.

 

As a visiting music teacher, Brazel essentially held a zero-hours contract as she did not have a set number of hours, and the hours she worked were decided at the start of each school term depending on the number of pupils wanting tuition. She also did not work during holidays but was nonetheless employed under a permanent contract. Because of this, the judge described her as a ‘part-year’ worker.

 

The Court of Appeal held that her holiday pay should be calculated based on a 12-week average of hours worked, making, on her hours, holiday pay around 17.5% of annual pay, rather than 12.07% for staff working a whole year.

 

GOV.UK guidance

Guidance for calculating holiday pay for workers without fixed hours or pay has been updated reflect this agreement of the ruling to use a 12-week average method, rather than the 12.07% method used previously.

 

Calculating holiday pay for term-time workers

 

This will depend on the term time worker’s contract.

 

If they have a full-time, permanent contract, then it is likely that they will be paid their normal weekly rate of pay for all school holiday periods (typically 13 weeks of leave per year).

 

If they have a part-time permanent contract, then they will also likely receive their normal weekly rate of pay for all school holiday periods.

 

If however they are only paid for hours actually worked and so not during school holiday periods, such as:

 

  • a worker paid by the hour
  • a supply teacher provided by an agency
  • a temporary worker on a short-term contract
  • a worker on a zero-hours contract

then an employer should apply a 12-week holiday pay reference period (substituting any whole weeks in which no pay was received for weeks in which pay, however minimal, was received) to calculate the correct amount of holiday pay.

 

The 12-week holiday pay reference was judged to be appropriate for term-time workers in the 2018 Brazel v Harpur Trust case.

 

Example

 

A part-time music teacher has a zero-hours contract entitling them to 5.6 weeks’ annual leave. They have a term-time contract meaning they work 32 weeks per year. They must take their 5.6 weeks of annual leave during the school holidays. They should, therefore, be paid for 5.6 weeks of leave taken at some point during the school holidays.

 

The school breaks up for summer holidays on Friday 25 July and the teacher decides to take a two-week paid holiday in mid-August before school returns on 10 September. The employer should, therefore, take an average of the teacher’s pay rate over the last 12 weeks in which they worked, starting with the last week at the end of the summer term and omitting any other periods of school holiday in which the teacher was not paid.

 

Acas guidance

New basic guidance from Acas (still in beta) refers to holiday pay for workers with no fixed hours.

 

For workers on casual work with no normal hours, for example on a zero-hours contract, holiday pay will be based on the average pay received over the previous 12 weeks.

 

These should be weeks in which the worker was paid. If no pay was received in one of those 12 weeks (because no work was done), the last paid week before that should be used to calculate the holiday pay.”

 

Note that Acas’ holiday pay leaflet is now out of date and requires an update to reflect the Brazel v Harpur ruling.

 

 

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