Guidance on recent Supreme Court Ruling on Holiday Pay

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General message for all schools on a review and implementation of Holiday Pay for TTO and similar atypical workers.

Bradford Council has already been in discussions with all recognised Trade Unions through its Joint Consultative processes and has given an undertaking to investigate the implications of a major employment law development in schools and with its own employee’s /workers in various Council services. This review will identify what current practices and calculations are currently used for holiday pay and whether any required changes are needed in the future.

This review is necessitated by the recent Supreme Court decision Harpur Trust v Brazel case. Advice and a template letter in response to any GMB letter received will be provided to all Council controlled schools and academies who currently use PACT HR and payroll services.

Harpur Trust v Brazel Supreme Court case and decision in Summary

Mrs Brazel was a music teacher employed by the Trust on a permanent contract. She worked variable hours each week during term time only. Her hours of work would fluctuate based on the demand for lessons from students. She was therefore both a part-time and part-year worker with irregular hours, on a permanent zero hour's contract. Mrs Brazel took her holiday in three equal tranches at the end of each term. Originally the Trust calculated her holiday pay for each tranche based on her average weekly pay for the previous 12 weeks, this has now changed to 52 weeks, (ignoring those weeks where she did not receive pay), as required under the legislation. However, in September 2011, the Trust changed the way it calculated Mrs Brazel's holiday pay and adopted the 12.07% method (discussed in further detail below).

This produced a less favourable result for Mrs Brazel than the previous calculation. Mrs Brazel brought proceedings in the Employment Tribunal for unlawful deduction of wages, which decided against her on the issue. She then appealed to the Employment Appeal Tribunal, where she was successful. The Trust appealed this decision but was unsuccessful  in the Court of Appeal. This then led to an appeal to the Supreme Court, who have ultimately rejected the Trust's argument and have confirmed that part-year workers should not have their holiday pay pro-rated.

Who is impacted by this decision?

This judgment will impact the holiday pay calculation for workers on permanent contracts who have irregular working patterns where their pay corresponds to those working patterns. As such, only workers with no normal working hours and who are paid on an hourly or daily basis will be impacted. It is likely that the definition of 'permanent' contracts will be open to debate. This means that the decision does not impact full-time workers, part-time workers with regular hours, or any worker with a fixed salary

As such, for schools, this means, for example, that a teaching assistant (whether part-time or full-time) on a permanent term-time only contract, who is paid a salary, will not be impacted by the Supreme Court's decision.

Although there is little doubt that the Supreme Court decision adversely impacts employers of part-year workers in particular, the decision is not limited to part-year workers only and, for example, would also apply to part-time workers with no set hours (i.e. zero-hours workers).

As a result, it could also impact on other workers in schools and departments such as casuals, zero hours’ contracts and similar atypical workers.

Assessment of the impact of this decision on schools

Once all reports have been analysed and legal and conditions /calculations clarified the impact of this review can be established and the outcome confirmed to affected educational establishments.

PACT HR and Bradford Council Payroll Services will ensure that further communication is provided to all schools that buy their services and provide advice including further guidance, template letters and contractual changes as appropriate next steps.  This will be sent out directly to those schools and if you have any further questions, please contact your HR Business Partner.

Schools where Bradford Council is the employer, but do not buy PACT HR or Payroll Services from Bradford Council are advised to seek urgent advice from their current HR and Payroll providers on this case and refer back to the Councils HR advice which will be posted on Bradford Schools Online, as any departure from the Council’s advice could leave the Council as the legal employer at risk of future claims.

Any other Educational institution where Bradford Council is not the employer, such as VA schools, Academies or Multi Academy Trusts that do not buy PACT HR or Payroll Services should take further advice from their HR/Payroll provider on the implications of this Supreme Court decision.

PACT HR and Payroll Services will ensure that further advice and guidance is made available as soon as possible. 


Information

Published: 07/10/2022
Audience: Head Teachers, School Business Managers
Contact: Please contact your designated HR / Payroll provid

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