Following the outcome of the 2022 Supreme Court decision in Harpur Trust v Brazel (one of the most significant holiday pay cases of recent years), the government released a consultation earlier this year on the calculation of holiday entitlement for part-year and irregular-hours workers. The government released a response to the consultation, as part of wider EU legislative reforms. 

January 2024

Following the consultation outcome, the government introduced changes to the Working Time Regulations on 1 January 2024. Most of these reforms apply to the leave year beginning on or after 1 April 2024, so for many schools and colleges, this will be the leave year commencing 1 September 2024.

To support organisations, the government has released guidance covering the changes, including:

• irregular hours workers and part-year workers
• accrual of COVID-19 carryover of leave
• rates of holiday pay and annual leave
• rolled-up holiday pay.

Note that we are aware of some uncertainty being raised between the guidance and the legislation, particularly regarding whether term-time-only staff (eg teaching assistants) would be part-year workers. We would therefore advise that members setting pay structures seek advice from their HR teams.

Consultation outcome – November 2023

• For holiday years commencing from 1 April 2024, the government aims to address the Supreme Court ruling in Harpur Trust v Brazel and introduce a new accrual method to calculate annual leave entitlement of 12.07% of the hours worked in a pay period for irregular hours and part-year workers
• Under the proposed new legislation, annual leave entitlement for irregular hours and part-year workers will be calculated at the end of each pay period
• Other workers will continue to accrue leave at 1/12th of their entitlement on the first day of each month during their first year of employment.

These changes are expected to come into force on 1 January 2024, subject to parliamentary approval.

What’s the background to this?

The Harpur Trust v Brazel case concerned the holiday entitlement and pay for a music teacher who was engaged on an ongoing contract of employment but was only required to work during term time.

The Supreme Court held that Ms Brazel’s annual leave entitlement under the Working Time Regulations 1998 should not have been prorated so that it was proportionate to the amount of time she worked (calculated as being 12.07% of wages), but rather should be calculated by looking at the average pay received for weeks that were worked. In effect, this means that part-year workers would be entitled to a higher sum for paid holiday entitlement than part-time workers, even where they work the same number of hours across the year.  

Given the nature of employment in schools for certain roles, it was expected that many settings may have been impacted by this judgment.

When looking at the case, the Supreme Court acknowledged that its decision could result in anomalies. The government’s consultation sought to address these anomalies and ensure that the annual leave entitlement for all workers is proportionate to the amount of time they spend working.

With my 'manager hat' on, what do I need to consider?

It is expected that the changes will come into force from 1 January 2024. Note: that means, until this point, the judgment of the Supreme Court stands.

We anticipate that organisations will review their holiday practices and contracts to understand whether they will comply with the new, forthcoming, legislation. Given the legal nature of this check and its implications, we advise that employers engage with their legal advisors to facilitate this and that all key senior leaders are kept informed of the issue and any progress. 

TUC response to the consultation

NAHT fed into the TUC response to the government consultation.

What about my personal position?

If you think you might be personally impacted by this issue, please contact specialistadvice@naht.org.uk and we would be happy to discuss this with you on a fact-specific basis.