21st July 2022
The Supreme Court published their long-awaited decision yesterday (20 July 2022) regarding the Harpur Trust v Brazel holiday pay case.
The Supreme Court upheld the decision of the Court of Appeal. The outcome is that the holiday pay entitlement of workers who work only part of the year but are engaged under a permanent contract throughout the year, should not have their holiday pay calculated by using 12.07% of the hours actually worked.
The Supreme Court held that holiday pay for part-time workers should be calculated under the averaging method over a 52-week period. When the case was first taken, the averaging period was 12 weeks, and excluded any weeks not worked.
It was concluded that workers who were engaged on permanent part-year contracts must receive at least 5.6 weeks holiday, even where they only work for one or two weeks a year. This is on the basis that there are no pro-rota provisions under the Working Times Regulations 1998.
Consequently, workers will need to be paid 5.6 weeks of holiday entitlement, which will be based on the normal weekly pay.
Employers will need to review the current contracts in place with the workers and consider revising their holiday pay calculations.
As far as any potential historical liabilities are concerned, these will be limited to a two-year period. As this is a decision of the Supreme Court it provides certainty for both the employer and the worker.