Background
Ms Brazel, a visiting music teacher at Bedford Girls School, was employed by the trust on a zero-hours contract. Employed by Harpur Trust (Harpur) under a permanent contract on a zero hours basis. Harpur is not obliged to provide a fixed minimum amount of work and she is paid only for the amount of work carried out. Ms Brazel works mainly during school term-time. The length of the school terms vary from year to year but are between 32 and 35 weeks. She is a part-time worker in two senses, firstly, that she does not work a full working week and, secondly, that for large parts of the year (during school holidays) she does not work for Harpur at all. It is only this second type of part-time working with which this case is concerned.
Ms Brazel’s contract stated at that the annual leave year runs from 1 September to 31 August and that during the leave year Ms Brazel is entitled to 5.6 weeks’ paid leave. That leave must be taken during the normal school holidays or at such other times as are convenient for the school. Ms Brazel had always been treated as having taken her annual leave entitlement in three equal tranches in the winter, spring and summer school holidays, that is to say, 1.87 weeks of each school holiday was treated as annual leave for which Ms Brazel was entitled to be paid. Unused leave entitlement was to not be carried forward to a subsequent leave year and there was no pay in lieu of unused leave except on termination of her employment.
Before September 2011, Ms Brazel’s pay for the 1.87 weeks she was treated as taking during each school holiday was determined in accordance with section 224 of the Employment Rights Act 1996, as is required by regulation 16 of the WTR which incorporates section 224 for this purpose. Section 224 defined “a week’s pay” for this and several other purposes as the amount of Ms Brazel’s average weekly remuneration in the period of 12 weeks ending with the start of her leave period, ignoring any weeks in which she did not receive any remuneration. The Harpur Trust therefore worked out how much Ms Brazel had been paid during the twelve term-time weeks prior to the school holiday, divided that total by 12 and paid her 1.87 times that weekly average.
As from September 2011 the Harpur Trust changed the calculation. Ms Brazel was still treated as taking her annual leave entitlement in three equal tranches. But the Harpur Trust calculated Ms Brazel’s hours worked at the end of each term, took 12.07% of that figure and paid her the hourly rate for that number of hours. We will call this “the Percentage Method”. The Harpur Trust say that in calculating her leave entitlement in that way, they were following the method recommended by Acas in its guidance booklet Holidays and Holiday Pay for calculating the pay of casual workers. The relevant passage in the booklet states that if a member of staff works on a casual basis or very irregular hours it is “often easiest” to calculate holiday entitlement that accrues as hours are worked. 12.07% is the proportion that 5.6 weeks of annual leave bears to the total working year. The working year is the whole year (52 weeks) minus the annual leave (5.6 weeks) and so 46.4 weeks. 5.6 weeks is 12.07% of 46.4 weeks. The Harpur Trust therefore treated Ms Brazel as entitled to 12.07% of her total pay for the term.
The pay to which Ms Brazel claims she is entitled would be worked out as follows. As we have said, the assumption made is that Ms Brazel is entitled to be paid for 1.87 weeks in the Easter holidays. She worked 127 hours over the whole spring term. But that term was only ten weeks long and section 224 requires a 12-week reference period. One must therefore add in the hours she worked in the last two weeks of the Autumn term 2012 to make up the 12 weeks. She worked 22.5 hours in the last two weeks of the Autumn term so her total number of hours in the reference period was 149.50. Multiplied by the hourly rate of £29.50, that makes the total pay received in the preceding 12 weeks £4,410.25. Dividing that by 12, one arrives at the average week’s pay of £367.52. Her pay entitlement for the 1.87 weeks’ leave she took during the Easter holiday 2013 was therefore £687.26. We shall call this method the “Calendar Week Method”.
According to the method now adopted by the Harpur Trust, one takes the total number of hours worked by Ms Brazel during the spring term, that was 127 hours. 12.07% of that is 15.33 hours. The Trust multiplied that number of hours by the hourly rate of pay of £29.50 to arrive at £452.20 for her pay for the annual leave she was treated as taking during the Easter holiday. Under this method, the Harpur Trust say, the leave requirement accrues in proportion to the time the worker works so that this method, unlike the Calendar Week Method, is compliant with the conformity principle.
Ms Brazel brought proceedings, arguing that this was in breach of the Working Time Regulations and Part-time workers (Prevention of Less Favourable Treatment) Regulations. This was dismissed by the Employment Tribunal.
Ms Brazel then appealed and succeeded. Harpur then went to the Court of Appeal. Harpur’s principal argument was that it was necessary to reduce Ms Brazel’s holiday entitlement to reflect the fact that she worked for only part of the year, in order to avoid obviously unjust results.
The Court of Appeal concluded that workers engaged on permanent part-year contracts must receive at least 5.6 weeks holiday. This could not be pro-rated, because the Working Time Regulations 1998 don’t include a pro-rata principle in these circumstances.
It accepted that this approach would lead to odd results in the “extreme” cases such as those of an exam invigilator who may only work for a few weeks per year but said that general results sometimes do produce anomalies. Further, it would be unusual for those who work for only a few weeks a year to be on a permanent contract.
Supreme Court – 20th July 2022
The Supreme Court yesterday (20th July 2022) unanimously ruled in Brazel’s favour and found that she should receive the same holiday pay as staff who work all year round.
The Supreme Court identified problems with the Harpur Trust’s proposed alternative calculation methods, stating the methods proposed are very different from the statutory method set out in the working time regulations. They also said in a number of ways the methods are directly contrary to what is set out in the WTR.
The second problem with the two methods proposed by the Harpur Trust is that for a worker working an irregular number of hours per week over the course of the year, the calculations are extremely complicated. The proposed scheme would require all employers and workers to keep detailed records of every hour worked, even if they were not paid at an hourly rate.
The Harpur Trust also argued that the construction upheld by the Court of Appeal leads to an absurd result, that absurdity being that a worker in Ms Brazel’s position (and in the position of some of the other hypothetical workers put in place by the Harpur Trust) receives holiday pay which represents a higher proportion of her annual pay than full time or part time workers who work regular hours. It was recognised that a construction which leads to an absurd result is, in general, unlikely to be what Parliament intended. However, they do not regard any slight favouring of workers with a highly atypical work pattern as being so absurd as to justify the wholesale revision of the statutory scheme which the Harpur Trust’s alternative methods require. It was agreed with Underhill LJ’s observation as to the odd results produced in extreme cases, such as the exam invigilator in the Harpur Trust’s Case 1.
The Supreme Court therefore concluded that the Court of Appeal was correct to hold that the Calendar Week Method represents the correct implementation of the WTR.
Link to the judgment:
https://www.supremecourt.uk/cases/docs/uksc-2019-0209-judgment.pdf
