Harper Trust v Brazel – Government Issues Consultation Paper
Readers may recall the landmark 2022 Supreme Court holiday pay judgment in Harper Trust v Brazel which, amongst other things, meant that “part-year workers” - those who are employed for the whole year but only work part of the year - were entitled to proportionally more holiday entitlement than than their colleagues, including part time and full time workers.
The far reaching judgment, in practice, meant that businesses should have moved away completely from the often used 12.07% calculation and instead reverted back to the full 5.6 calculation for all workers.
Government commentary has stated that the judgment was thought to affect between 320,000 and 500,000 permanent term-time and zero-hours contract workers in the UK, and has caused widespread confusion among businesses. As a result government has now issued a consultation paper proposing new legislation to clarify matters. The consultation ended on 9 March 2023 and the initial comments can be found at the link at the end of this article.
In a nutshell, the proposals from government are that when businesses calculate holiday pay, the 52-week reference period (remember we no longer use the 12 week calculation period) should include those weeks in which no work is performed. This is a marked departure from the current method of calculating holiday entitlement, however it would ensure that a part-year worker’s holiday pay and entitlement is proportionate to the number of hours they work in a year.
As of the date of this article, April 2023, the Supreme Court ruling in Harper Trust v Brazel is still legally binding and employees are entitled to bring claims against employers for deduction from wages on this point if they wish. It is, however, hoped that changes to legislation should be pushed through soon and employers are therefore encouraged to try and delay any internal discussions on the point, including any amends to policies and procedures, until the new legislation is passed.
These notes have been prepared for the purpose of articles only. They should not be regarded as a substitute for taking legal advice.