What do we already know?
We updated you in our last newsletter (here) on the Supreme Court’s decision in Harpur Trust v Brazel that calculating statutory paid holiday entitlement at the rate of 12.07% hours worked (the percentage method) was incorrect as holiday should not be prorated.
This decision has led to the tricky situation where some part-year and irregular hours workers (i.e. workers on permanent contracts who do not work every week of the year) are lawfully entitled to receive more holiday and/or holiday pay than part-time workers who work the same total number of hours but spread regularly across the year.
Given the complexities (and unfairness) caused by the Supreme Court’s decision in Harpur Trust v Brazel that holiday should not be pro-rated, the Government is seeking to address this issue. It has published a consultation (‘Calculating holiday entitlement for part-year and irregular hours workers’, available here) which proposes to reverse the conclusions reached by the Supreme Court.
If implemented, employers would be able to return to pro-rating holiday for part-year workers based on a 12.07% method.
The consultation is open until 9 March 2023.
Hopefully this consultation will lead to a change in the law, but unfortunately until then the Supreme Court’s decision remains binding law. Therefore although employers may wish to pause on amending their holiday practices until the outcome of the consultation, this does leave open the risk that staff will bring claims on the basis of the position under Harpur Trust.
So, if you are (understandably) considering pressing pause, it may well be worth contacting us first to discuss the risk ( email us on firstname.lastname@example.org or call 0117 325 0526).