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Holiday pay calculation cannot be pro-rated for a term-time worker

Makbool Javaid

Can an employer pro-rata holiday pay for a part-year teacher who is employed on a term-by-term basis? “No” confirmed the Court of Appeal in Brazel v The Harpur Trust. The Working Time Regulations 1998 (WTR) provide workers with the right to 5.6 weeks’ paid annual leave under Regs 13 and 13A. Reg 16 WTR requires a worker to be paid at the rate of a week’s pay in respect of each week of leave calculated in accordance with Ss. 221 to 224 of the Employment Rights Act 1996 (ERA). The employer paid B three times per year in respect of her holiday pay. The employer argued that as 5.6 weeks constitutes 12.07% of a working year, B’s holiday pay should be calculated based on 12.07% of her earnings during the previous term. B argued that this resulted in an underpayment. Under the calculation required by the ERA, the average earnings for a worker with no normal working hours over the preceding 12 weeks in her position equated to 17.5% of her earnings. The CA rejected the employer’s argument. The WTR make no provision for pro-rating. They simply require a straightforward exercise of identifying a week’s pay in accordance with Ss. 221-224 ERA and multiplying that figure by 5.6. Trying to build in a pro-rating requirement or an accrual system would be substituting an entirely different scheme.

The updates are kindly provided by Simons Muirhead & Burton Law firm

This update provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and help judgments made in every aspect of the case. Click on the links to access full details. If no link is provided, contact us for more information.  Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, SM&B cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.

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