Harpur Trust v Brazel

A worker engaged throughout the year under a permanent contract, but required to work only during certain weeks, is entitled to the statutory 5.6 weeks’ annual leave. The entitlement may not be reduced in proportion to the weeks actually worked.

For a worker without normal working hours, holiday pay must be calculated from average weekly remuneration under section 224 of the Employment Rights Act 1996. Weeks for which no remuneration was payable are excluded from the reference period. The resulting Calendar Week Method may favour workers with atypical working patterns, but it reflects Parliament’s chosen scheme.

The Working Time Directive prescribes minimum rights and permits more generous domestic provision. EU conformity therefore provides no basis for replacing the statutory calculation with a percentage-of-earnings or worked-year method.

The respondent was a visiting music teacher employed throughout the year under a permanent contract. She worked irregular hours during school terms, received no pay during school holidays and had no normal working hours. Her employer replaced a calculation based on average weekly remuneration with a method paying 12.07% of her term-time earnings.

Her unlawful-deduction claim was dismissed by the Employment Tribunal. The Employment Appeal Tribunal allowed her appeal, holding that the statutory wording required payment of a week’s pay for each of 5.6 weeks’ leave. The Court of Appeal dismissed the employer’s appeal in [2019] EWCA Civ 1402; [2020] ICR 584.

The central issue was whether the entitlement and pay of a permanent part-year worker must be reduced to reflect weeks in which no work was performed, or calculated under the statutory Calendar Week Method.

1. The appeal was dismissed unanimously. Lady Rose and Lady Arden gave the judgment, with which Lord Hodge, Lord Briggs and Lord Burrows agreed. A part-year worker employed under a permanent contract is entitled to 5.6 weeks’ annual leave. The entitlement is not reduced in proportion to the number of weeks actually worked.

2. The Working Time Directive generally links its minimum annual-leave entitlement to work actually performed, subject to recognised exceptions. It nevertheless establishes minimum requirements and permits member states to confer more favourable rights. A domestic rule giving a part-year worker proportionately greater leave therefore complies with EU law. The principle of conforming interpretation could not justify rewriting the domestic scheme.

3. Regulations 13 and 13A of the Working Time Regulations 1998 prescribe leave in weeks. They contain express time-based apportionment where employment begins during a leave year, but no mechanism for reducing a permanent part-year worker’s entitlement according to weeks worked. Regulation 14 likewise uses elapsed time rather than work performed when calculating compensation on termination. These provisions show that actual work is not the organising principle of the domestic scheme.

4. Holiday pay is a separate calculation. Regulation 16 incorporates sections 221–224 of the Employment Rights Act 1996. For a worker without normal hours, section 224 requires average weekly remuneration to be calculated over the statutory reference period, disregarding weeks for which no remuneration was payable and bringing in earlier paid weeks. This Calendar Week Method must be used even if it produces a higher ratio of holiday pay to annual earnings than for a worker employed throughout the working year.

5. The employer’s Percentage Method and Worked Year Method were inconsistent with the legislation. The former avoided calculating a week’s pay as regulation 16 requires. The latter gave “week” a meaning materially different from a calendar week. Their complexity and anomalous hypothetical cases supplied no basis for creating a new statutory scheme.

6. Leave does not ordinarily accrue only as hours are worked. Regulation 15A expressly creates monthly deemed accrual during the first year of employment, demonstrating that any such restriction requires statutory provision. Section 229(2) of the 1996 Act is confined to the just apportionment of remuneration attributable to a period different from its payment period; it is not a general power to recalculate a week’s pay.

1. United Kingdom Supreme Court: Dismissed the employer’s appeal and affirmed the Calendar Week Method: [2022] UKSC 21.

2. Court of Appeal: Dismissed the employer’s appeal, holding that the statutory scheme did not permit further pro-rating for weeks not worked: [2019] EWCA Civ 1402; [2020] ICR 584.

3. Employment Appeal Tribunal: Allowed the worker’s appeal. The clear statutory wording required a week’s pay for each of 5.6 weeks’ leave, calculated from the preceding paid weeks.

4. Employment Tribunal: Dismissed the worker’s unlawful-deduction claims after accepting that holiday pay should be pro-rated to reflect term-time working.