The Supreme Court Decision Harpur Trust v Brazel
On 20 July 2022, the Supreme Court issued its long-awaited decision in the case of Harpur Trust v Brazel regarding the correct calculation of annual leave and holiday pay for employees with irregular working patterns.
What the impact will be for term time teachers and support staff.
The immediate impact will be for employed (contract of employment) part-year workers.
Does the ruling apply to workers engaged on contracts for services, where there is no overarching agreement between the employment business (agency) and the worker?
The REC (Recruitment and Employment Confederation) have issued guidance stating “The Brazel decision relates to part-year workers on permanent contracts of employment. This means that the judgment does not directly affect workers on contracts for services, provided that the contract for services is properly drafted and used”.
4myschools use contract for services for all workers where there is no overarching agreement whilst the worker is not assigned. Our automated and compliant assignment confirmations have clear start and end dates.
What is the difference between part-time and part-year workers for the purposes of the judgment in Harpur Trust v Brazel?
Brabners have prepared these answers published by the REC.
The term “part-time worker” is commonly understood to refer to someone who does not work a 5-day week. For example, they may only work 3 days a week, but generally speaking, they will work every week of the year apart from when they are taking holiday.
The term “part-year worker” was coined by the Court of Appeal in Mrs Brazel’s case to refer to the fact that Mrs Brazel did not work every week of the year (specifically, she only worked during term time), but she remained employed on a permanent, continuing contract of employment throughout the year. Assuming that term time totals 32 weeks (although this can vary from year to year and school to school), this meant that Mrs Brazel might only work for a maximum of 32 weeks out of the year. Factoring in her annual holiday entitlement of 5.6 weeks, this meant there could be at least 14.4 weeks per year when she was neither working nor on holiday, but she remained employed throughout.
What are the important principles
According to a recent blog Brabners Law Firm state “It is important to note that the principles in this case apply to individuals who are engaged under a permanent contract which continues even during periods when the individual isn’t working. This case is therefore likely to have the greatest effect on businesses which engage teachers, seasonal workers or other individuals who do not work all year round or have breaks in their working pattern. If those individuals are engaged under permanent contracts then they are entitled to 5.6 weeks’ holiday per year, paid at the rate of their average weekly wages, even if there are significant parts of the year when they do not do any work. This decision will also have a particular impact on “umbrella” employers, who typically employ individuals under permanent contracts, even though they may work on an ad-hoc basis with breaks in-between their assignments.
On the other hand, the Supreme Court’s decision is unlikely to affect individuals engaged under fixed term contracts or “contracts for services” which come to an end after each assignment, with no continuity in-between.
Employees or workers who believe they may have been underpaid holiday pay will generally only have 3 months from the date of the last underpayment to bring a claim for unlawful deductions from wages, and a Tribunal can usually only order an employer to repay any unlawful deductions going back a maximum of two years.”
Important Note for Schools and Trusts
Andrew Willis a senior manager of the Litigation and Employment Department at Croner explains.
“This is an important case for any employer calculating holiday pay for atypical workers. The key takeaway from this judgement is that all workers (note, this includes employees) should be getting 5.6 weeks leave. It doesn’t matter how many weeks in the year they work. What is crucial is:
- That their contract is ongoing
- That they are not required to work every week of the year
- That their holiday pay should be based on an average over 52 weeks in which they have performed work
Moving forwards, employers may need to reconsider their use of permanent zero hours contracts.
How can I tell if a contract is a Contract for Services (worker) or a Contract of Employment(employee)
First look to see if there is a written contract and whether the wording of the contract states that it is a contract of employment or a contract for services.
Contracts of employment contain some “mutuality of obligation” between the parties. Mutuality of obligation is where there is an obligation on the part of the employer to provide and pay for work done and an obligation on the worker to perform that work
Contracts of services on the contrary there is no obligation to provide work and no obligation to perform any work offered, this model is more widely used by agencies.
There are many factors to consider, please seek legal advice on the type of contract you are currently using.
What is the impact on AWR calculations and pay parity.
Regulation 6 of the Agency Workers Regulations specifically states that the qualified agency worker should receive the same terms and conditions relating to annual leave as permanent employees. For the time being, this point has not been debated in the courts, but the application of equal treatment under Regulation 6 would include applying the same method of calculating holiday entitlement for a comparable employee to a qualified agency worker.
4myschools will require schools and trusts where we supply workers to continue to provide transparency of contracts used for comparable employees so we can be sure pay parity for our workers and protect schools from future tribunal claims.
The content for this article originated from articles by The REC, of which 4myschools is a corporate member and holds Audited in Education status, Brabners Law Firm and Croner
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