The Harpur Trust v Brazel [2022] UKSC 21

Mrs Brazel, a part-year visiting music teacher, claimed her employer underpaid her holiday pay by using a percentage method rather than the statutory formula. The Supreme Court held that part-year workers are entitled to 5.6 weeks paid leave without pro-rating for weeks not worked, rejecting the employer's alternative calculation methods.

Facts

Mrs Brazel was employed as a visiting music teacher at Bedford Girls School, run by the Harpur Trust. She worked varying hours during term time only, with no guaranteed minimum hours. Her contract entitled her to 5.6 weeks paid annual leave, taken during school holidays. Before September 2011, her holiday pay was calculated using the statutory ‘Calendar Week Method’ under section 224 of the Employment Rights Act 1996, averaging her pay over the preceding 12 working weeks. From September 2011, the Harpur Trust changed to a ‘Percentage Method’, paying her 12.07% of hours worked each term, following then-current Acas guidance.

The Dispute

Mrs Brazel brought a claim for unlawful deductions from wages, arguing the Percentage Method underpaid her statutory holiday entitlement. The Employment Tribunal dismissed her claim, but the Employment Appeal Tribunal allowed her appeal. The Court of Appeal upheld this decision, and the Harpur Trust appealed to the Supreme Court.

Issues

The central issue was whether a part-year worker’s statutory leave entitlement under the Working Time Regulations 1998 (WTR) should be pro-rated to reflect the weeks in which they do not work, or whether they are entitled to the full 5.6 weeks without such reduction.

The Conformity Principle

The Harpur Trust argued that EU law, specifically the Working Time Directive (WTD), required leave entitlement to be calculated proportionally to time actually worked (the ‘conformity principle’), and that the WTR should be interpreted accordingly.

Judgment

The Supreme Court unanimously dismissed the appeal, holding that the Calendar Week Method correctly applied the WTR and was fully compliant with EU law.

Key Reasoning

Lady Rose and Lady Arden, delivering the joint leading judgment, held that while CJEU case law suggests minimum WTD entitlements are generally calculated by reference to work actually carried out, the WTD does not prevent member states from making more generous provision. They stated:

“Even if, therefore, the proper construction of the WTR results in Mrs Brazel being entitled to a greater amount of leave than she might be strictly entitled to under the WTD and to a proportionately greater leave requirement than full-time workers, such a construction is compliant with the WTD.”

The Court found no mechanism in the WTR for excluding weeks where no work is performed when calculating leave entitlement, unlike the express provision in section 224 for calculating average weekly pay. The Court observed:

“On conventional principles of interpretation, however, the fact that section 224 applies for one purpose, namely for calculating the average weeks pay and not for another, namely for calculating the number of weeks leave, is an indication that there was no similar provision for determining the length of the leave.”

Rejection of Alternative Methods

The Court rejected both the Percentage Method and the proposed ‘Worked Year Method’ as being contrary to the statutory scheme. Lady Rose and Lady Arden noted:

“The methods proposed are very different from the statutory method set out in the WTR… The Percentage Method does not involve calculating a weeks pay despite the fact that regulation 16 of the WTR mandates that the pay entitlement should be calculated in accordance with section 224.”

Absurdity Argument

Addressing the argument that the Calendar Week Method produced absurd results by giving part-year workers proportionately more paid leave than full-time workers, the Court stated:

“We do not regard any slight favouring of workers with a highly atypical work pattern as being so absurd as to justify the wholesale revision of the statutory scheme which the Harpur Trust’s alternative methods require.”

Implications

This judgment has significant implications for employers of part-year and casual workers. It confirms that such workers on permanent contracts are entitled to the full 5.6 weeks statutory paid annual leave without pro-rating for weeks not worked. Holiday pay must be calculated using the statutory averaging method under section 224 of the Employment Rights Act 1996. The decision led to updated BEIS guidance reflecting this position and affects sectors employing term-time workers, including education, leisure, and seasonal industries. Employers cannot lawfully use percentage-based methods that effectively reduce holiday entitlement below the statutory minimum.

Verdict: Appeal dismissed. The Supreme Court upheld the Court of Appeal’s decision that part-year workers are entitled to 5.6 weeks paid annual leave calculated using the Calendar Week Method prescribed by the Working Time Regulations 1998, without pro-rating for weeks not worked.

Source: The Harpur Trust v Brazel [2022] UKSC 21