Mrs Brazel was a term-time only music teacher who was engaged on a permanent employment contract. Her hours of work varied from week to week during the school term and she did not work during school holidays.
The question for the Supreme Court was whether she was entitled to the full statutory holiday entitlement of 5.6 weeks’ holiday a year, paid at her average weekly rate, or whether her holiday entitlement should be reduced to reflect the fact that she only worked during term time. If her holiday was not reduced, she would receive proportionately more holiday than other employees in relation to her actual hours of work. The Harpur Trust argued that as a matter of EU and domestic law, holiday entitlement should be calculated by reference to periods of actual work.
EU law remained relevant to the case, which started before Brexit.
The Supreme Court accepted that, subject to some exceptions, EU law requires paid annual leave to be determined by reference to work completed under the employment contract. However, it is open to member states to make more generous provisions for annual leave than those required by the Working Time Directive.
Turning to the proper construction of the Working Time Regulations (the Regulations), the Supreme Court did not accept that they could or should be interpreted to reflect the EU law principle. Although the Regulations require weeks during which an employee does not work to be ignored when calculating their average weekly pay, they do not contain a similar provision requiring such weeks to be ignored when calculating their entitlement to annual leave. Employers are required to calculate holiday for full time, part time and part year employees on a consistent basis. The Regulations do not permit an employer to reduce one employee’s holiday entitlement to ensure that is a proportional to that received by others.
Although the Harpur Trust had put forward various other methods for calculating holiday that it said would be consistent with the EU law principle, the Regulations reflect a policy choice by Parliament as to how holiday entitlement should be calculated and paid. The fact that this may result in some workers with atypical working patterns having a slight advantage over other workers is not so absurd as to justify the wholesale revision of the existing statutory scheme.
As a result of the decision, employers with staff who do not work throughout the year, but who are covered by a contract even when they are not working, may need to revisit how much holiday they give such staff. Although this has been an issue for employers since the EAT decision in this case, some employers have maintained their existing approach to holiday entitlement pending the Supreme Court’s decision. It is now clear that calculating a term time worker’s holiday by reference to their actual hours of work is not compliant with the Regulations in their current form.
Authored by Jo Broadbent and Ed Bowyer.