Thousands of teachers on term-time-only contracts, and workers with similar arrangements, could be entitled to back pay after a ruling by the UK’s highest court.
The supreme court judgment on Wednesday means such employees should receive the same amount of paid annual leave as their colleagues working all year around.
Employers who previously pro-rated the holiday entitlement of people working part of the year on permanent contracts will have to change their practices, and could also face claims for underpaying staff in the past.
The five supreme court justices were asked to consider whether Lesley Brazel, a music teacher with a continuing contract but who worked only certain weeks of the year, was entitled to 5.6 weeks of paid annual leave, the minimum stipulated by the UK Working Time Regulations (WTR).
Her employer, Harpur Trust, a charity that runs Bedford Girls’ School, where Brazel works, argued that she was not entitled to the 5.6 weeks afforded to full-time workers and that Brazel’s leave entitlement should be calculated proportionally so the weeks in which she did not work reduced her paid annual leave.
The judges unanimously found in favour of Brazel, upholding a decision of the court of appeal. In the written judgment, Lady Rose and Lady Arden wrote that Harpur had argued “that the construction upheld by the court of appeal leads to an absurd result, that absurdity being that a worker in Mrs Brazel’s position (and in the position of some of the other hypothetical workers posited by the Harpur Trust) receives holiday pay which represents a higher proportion of her annual pay than full-time or part-time workers who work regular hours.
“We recognise, of course, that a construction which leads to an absurd result is, in general, unlikely to be what parliament intended. However, 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.”
They said the idea of leave accruing over the year as and when hours are worked was inconsistent with the WTR. Rose and Arden also said the methods proposed by Harpur would require “extremely complicated” calculations and for all employers and workers to keep detailed records of every hour worked, even if they were not paid at an hourly rate.
The judges noted that the Department for Business, Energy and Industrial Strategy had issued guidance on holiday pay reflecting the court of appeal’s decision after Brazel’s victory.
Unison, which intervened in the case because of its implications for thousands of school staff employed on term-time-only contracts, welcomed the decision.
Christina McAnea, Unison’s general secretary, said: “Teaching assistants or other education employees might only be contracted to work when schools are open, but they’re also sometimes required to do their jobs at other times.
“Today’s decision clarifies the law and says that annual leave taken by someone who works less than a full year can no longer be pro-rated to that of a colleague employed all year round.”
Nick Hurley, a partner and head of the employment group at the law firm Charles Russell Speechlys, said although there might be a “windfall” for workers who the judgment applied to, such employees tend to be lower paid and to not have regular guaranteed hours.
Joanne Moseley, an employment lawyer at Irwin Mitchell, said: “We’ve seen that organisations have been caught out by previous holiday pay rulings and this one is sure to place a significant financial burden, which could run into millions of pounds, for many.”
Brazel said: “I am pleased to have secured my holiday pay rights, in accordance with the law and my contract of employment, in the highest court in the country. I hope that others can now benefit from this verdict.”
