UK Full-Time Staff Get Less Favorable Holiday Pay Treatment

Calculating paid time off for workers can be a daunting task, especially for those who work irregular hours throughout the year, such as casual workers or those engaged on zero hours contracts or are working part time with variable hours. And UK employers are grappling with the task as they try to meet their legal obligations while awaiting the outcome of a Supreme Court case involving the pro-rating of leave.

All UK workers are entitled under the Working Time Regulations 1998 (WTR) to 5.6 weeks’ paid leave in each year. But does that pertain to all workers or only to those who work the full year? In other words, can employers pro-rate payment for the paid leave entitlement for permanent staff who only work for part of the year?

That was under consideration by the Court of Appeal (CA) in the recent case of Harpur Trust v Brazel — the established use of the 12.07% multiplier as a way of meeting holiday pay entitlement came under judicial scrutiny.

The 12.07% multiplier is the result of calculating the full-time equivalent of paid leave versus weeks worked in the full 52-week year: 5.6 weeks’ mandated leave divided by 46.4 weeks worked = 12.07%. The remuneration for the actual weeks worked by the part-time or casual worker would then be multiplied by 12.07% to determine the amount of holiday pay.

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Lesley Brazel is employed as a visiting music teacher whose work hours are dictated by pupil demand. Thus, her hours and pay are variable.

Brazel works during term time and is not required to work during the school holidays. She was paid in respect of her holiday pay, three times a year, at the start of each of the school holiday period. The Trust relied on guidance from the Advisory, Conciliation and Arbitration Service that supported the 12.07% principle of pro-rating holiday entitlement from a full time 52 weeks per year contract. This was not the calculation specified in the Employment Rights Act 1996 but had been in widespread use since the WTR were introduced in 1998. This resulted in all workers receiving the same percentage of holiday pay, being treated equally, whatever their working pattern. However, Brazel claimed that this was not a correct interpretation of the law and that she was being underpaid during her holiday periods.

The Employment Tribunal agreed with the Trust and found that Brazel would receive around 17.5% of her annualised hours as holiday pay, which was more than a comparable full-time employee. However, her remuneration was less than it would have been if the correct statutory calculation had been used.

The appeal decisions

Brazel appealed the decision and the Employment Appeal Tribunal found in her favour. This decision was endorsed by the CA which found under the WTR:

  • There is no basis to pro-rate the 5.6 weeks’ holiday entitlement for those who work part of the year (pro rating is only lawful for those who work part of the week)
  • Holiday pay should be based on the calculation of a week’s pay as set out in the Employment Rights Act 1996 s 224 to calculate the weekly pay of irregular hour workers — i.e., the average weekly rate of remuneration in the previous 12 weeks worked
  • The purpose of the relevant EU and domestic provisions is to ensure that part-time workers are not treated less favorably than those who work full-time
  • Full-time workers may be treated less favorably than those who work part-time.

Permission to appeal to the Supreme Court is being sought.

What does this mean for employers?

The decision creates an anomaly, namely that term-time only and part year workers are entitled to a greater percentage of holiday pay than full time employees and workers. The Court confirmed that paying term-time and part year workers 12.07% of their salary as holiday pay was in breach of the law.

This judgement potentially affects:

  • any worker who has a permanent employment contract and is employed throughout the year but only actually works for part of the year (such as term time or term time plus workers);
  • any worker who works irregular hours, whose holiday pay entitlement has been calculated using the 12.07% (or similar) multiplier.


Employers who are contacted by staff and or trade unions requesting a recalculation of holiday pay for those who work part of a year may wish to adopt a position that they are waiting until the case has been reviewed by the Supreme Court.

Michael Delaney

Michael Delaney
Michael Delaney is a partner with Veale Wasbrough Vizards LLP. He advises on all aspects of employment law primarily for employers and senior executives involved.

Michael Delaney

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