On 19 June 2020, the Supreme Court ruled that Bedford-based charity, The Harpur Trust, is to be granted leave to appeal an earlier court ruling, which would have seen a significant change to the way in which employers calculate holiday pay for ‘part-year’ workers.
The leave to appeal means that the Supreme Court – the highest court in the land – has decided it’s a an important point with wider public significance.
Under the Working Time Regulations 1988, staff are entitled to a minimum of 5.6 weeks’ holiday leave and pay per year. To account for holiday pay for part time workers who work all year round, employers have provided an additional 12.07% of salary to be paid as holiday pay.
This ensures full and part time staff are treated equally and receive the same percentage/pro rata amount of holiday pay.
In line with nationally recognised ACAS guidance, The Harpur Trust also made the same holiday pay calculation for employees who worked for only part of the year i.e. ‘term time only’ employees.
At an Employment Tribunal in 2017, the Harpur Trust successfully defended a claim by a Visiting Music Teacher who queried this method of calculation.
The Employment Tribunal found that the Trust’s method of calculating holiday pay entitlement meant that the Claimant received proportionately the same as a full-year employee – the so-called ‘pro rata’ principle.
Under the earlier judgement, ‘part-year’ workers, such as those who work term time only, would have received proportionally more holiday pay than equivalent year-round workers.
However, the teacher subsequently appealed the decision at the Employment Appeal Tribunal and it ruled in her favour.
In describing the background to the appeal, the Harpur Trust said, “Whilst the legal reasoning of the Court of Appeal was understandable, it created an incongruous result.
“For example, a term-time only employee who works for 35 weeks per year, or even for only 10 weeks per year, would receive 5.6 weeks of holiday pay, the same as a colleague who works all year round.”
A spokesperson for The Harpur Trust said, “Trustees took the decision to seek leave to appeal because they believe it is the right thing to do.
“The potential overall cost of the earlier judgement would have been significant for many organisations, including many schools, charities, the care sector and higher education.
“Already stretched budgets would have needed to find even more funds to comply with the law.”