Background 

Mrs Brazel was a music teacher who worked at a school run by the Harpur Trust. She was employed under a permanent contract but did not have fixed hours and only worked during term time. 

Each year Mrs Brazel received three payments for holiday pay at the end of each term. On each occasion the employer calculated her working hours for the preceding term; and paid her holiday pay for 12.07% of those hours.   

The 12.07% figure was calculated by dividingthe statutory annual leave entitlement of 5.6 weeks by 46.4 weeks. The 46.4 weeks representedthe 52 weeks in a leave year, minus the 5.6 weeks statutory annual leave entitlement (the 5.6 weeks were excluded from the calculation on the basis that a worker would not be at work during those weeks to accrue annual leave).    

Mrs Brazel alleged that her employer had incorrectly calculated her holiday pay entitlement. The employer calculated Mrs Brazel’s holiday pay based on the hours that she actually workedduring term time. However, it was her case that, as she was employed all year round, she was entitled to a full 5.6 weeks of annual leave. 

Mrs Brazel’s case was initially unsuccessful at an Employment Tribunal. She then successfully pursued an appeal to the Employment Appeal Tribunal. 

The employer appealed to the Court of Appeal who again found in Mrs Brazel’s favour. The employer argued that it was unfair for Mrs Brazelto receive holiday pay on the same basis as if she worked a full year of 46.4 weeks, when she generally worked between 32 and 35 weeks per year. 

The Court of Appeal dismissed the appeal. That decision was the subject of an earlier Quarterly Education Law Updatein February 2020.   

Following the Court of Appeal decision, the employer lodged a further appeal to the Supreme Court. The Supreme Court hearing took place in November 2021 and the judgement has recently been issued. 

Supreme Court Decision 

The crux of the employer’s argument was that the Court of Appeal decision led to an absurd result as Mrs Brazel’s holiday pay entitlement represented a higher proportion of her annual pay than full-time or part-time workers who work regular hours throughout the year.  

The Supreme Court rejected the employer’s further appealtaking the view that a “slight favouring” of workers with highly untypical working patternswas not so absurd as to justify a wholesale review of the statutory scheme for the calculation of holiday pay. The Supreme Court went on to conclude: 

In short, the amount of leave to which a part-year worker under a permanent contract is entitled is not required by EU law to be, and under domestic law is not, prorated to that of a full-time worker. 

Conclusion 

If Schools have not already done so following the earlier Court of Appeal decision, they should now review how they calculate holiday pay for any member of staff who is employed on a permanent contract but who has weeks during the year when they are not actually working and are not paid.  

In addition, if schools are contemplating recruiting new staff on permanent contracts where they only work “term time”, they may wish to consider whether an alternative form of working relationship is appropriate (e.g. a fixed-term contract) or whether the proposed salary for such roles needs to be adjusted to reflect the higher proportion of holiday pay the individual is entitled to.