How does the Supreme Court ruling on term-time holiday affect me?

I’m confused by the Supreme Court ruling around annual leave. In my job I do not have the right to take annual leave. Instead the payment for that allowance is added into my pay. I currently work part-time hours for 39 weeks of the year as I have a term time only contract. I’ve previously asked for a breakdown of the hourly wage plus the additional leave payments but have never had one from HR that I could understand. Does this ruling change my rights at work around annual leave? Currently it is worked out pro rata and added into my salary.

Employee Rights Employment Equality Job Businessman Corporate Co - shift patterns

 

Holiday entitlements and pay for those who don’t work regular hours, particularly those who work term time only or on a zero hours basis, are a very tricky topic.

The case that was recently heard of Harpur Trust v Brazel has brought this into sharp focus – this is the Supreme Court case you’ve mentioned which was announced on 20th July 2022.  Effectively, the judgement confirms that employees who only work for part of the year, but permanently, are entitled to the same holiday allowance as those who work throughout the year. Under the Working Time Regulations, employees are entitled to 5.6 weeks’ paid annual leave and this case confirms that this should apply regardless of how many weeks a year  a person works.

I understand you work on a term-time contract which is a fixed permanent contract of part-time hours for 39 weeks of the year. You are entitled to be paid 5.6 weeks annual leave a year calculated based on the hours you work. If you are paid a monthly salary and not an hourly rate this would equate to 1/52 of your annual salary as holiday pay.

The ruling shouldn’t change your rights at work around taking annual leave; you’re still entitled to the equivalent of 5.6 weeks annual leave. As you work term time only it is fine for your University to say that you cannot take annual leave during term time – technically they are still letting you take the annual leave, but you are taking it during the holiday periods. But you don’t get the whole University holidays as your annual leave; 5.6 weeks is annual leave and the rest is technically unpaid leave. Normally for term-time only workers, the first 5.6 weeks holiday of the year is counted as the holiday entitlement and the remainder counts as unpaid time, but organisations can designate it in any way they want as long as they communicate it to you.

Depending on how your holiday pay was calculated in the past, the ruling may have changed how the holiday pay is calculated though. If your employer had been calculating your holiday as 12.07% of your hours worked or any other calculation that was less than one week’s normal pay they may have been underpaying your holiday. Therefore, if your holiday had previously been pro-rata’d to discount any weeks not worked, your employer should be amending this practice to now comply with the Supreme Court ruling and provide you with the full 5.6 weeks’ of annual leave.

I recommend you ask your employer again for a breakdown of how your holiday pay has been calculated in the past and ask specifically for how they calculate a week’s pay for holiday pay. This should make it easier to spot whether it is the same as your normal pay for a week or different. You could refer to the Harpur v Brazel case and ask them to review the arrangements.

Depending on their responses, you may have an unlawful deduction from wages claim for any underpaid holiday over the past two years.

As an aside, it is fine for them to pay you an “annualised amount” instead of paying you for the holiday when you take it, for example, taking your salary, adding the 5.6 weeks holiday aomunt and then paying you 1/12 of the full amount each month to avoid lower payments in the summer. This isn’t the same as pro-rata’ing the payment.

*Charlotte Farrell and Tabytha Cunningham are Associate Solicitors at Paris Smith in Southampton.



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