Julie Dunane CG Professional

How do Employers calculate Holiday Pay for Term Time Workers?

Julie Duane, Solicitor Advocate at CG Professional.

There has been a previous misconception that organisations would be entitled to calculate holiday entitlement for term-time workers on a pro-rata basis at 12.07% of their annual pay in accordance with the Working Time Regulations.  In the recent case of Harper Trust v Brazel, the Court of Appeal held that this position is incorrect and that an alternative formula should be used going forward.

The Facts

The Claimant is a clarinet and saxophone teacher of the Respondent.  She was employed by the Respondent which runs Bedford Girls School as a visiting music teacher which meant that she had not had a set number of working hours.  Ultimately the hours she was required to work would be dictated by the number of pupils requiring tuition in respect of the instruments.  Notably, during the periods which relate to her claim, she would typically be given between twenty and thirty half-hour lessons per week.  It was noted that the Claimant would give no lessons during the holidays and would have no other substantial duties during that period. 

As the Claimant satisfies the definition of a worker in accordance with the Working Time Regulations 1998 she would be entitled to 5.6 weeks paid annual leave, albeit in these circumstances she is considered a part-time employee and therefore would not receive the full entitlement but a pro-rata figure.

Employment Appeal Tribunal

At the EAT it was held that her holiday pay should be calculated based on a 12-week average of hours worked.  This would mean that her holiday pay would be around 17.5% of her annual pay rather than the 12.07% of staff working a whole year.  The EAT had held that the calculation of working out an annual leave terms pay at 12.07% was less than the calculation set out in section 224 of the ERA which takes a 12-week average of pay from weeks actually worked and ignores the out of term weeks.  It was therefore held that basing holiday pay on the 12-week average was the correct approach. 

Court of Appeal

The Court of Appeal, therefore, upheld the EAT’s decision and determined that this would be the appropriate step for those individuals who were employed all year round but not working the whole year. 

If you have any questions regarding calculating holiday pay for the term time workers or any other questions, please do not hesitate to contact a member CG Professional Team who would be more than happy to assist.