Workforce Solutions

Getting ready for Supreme Court decision affecting holiday pay for temps, zero-hour and umbrella workers

Published on 8th Dec 2021

A decision on the holiday pay issues in Harpur Trust v Brazel is anticipated in the new year – businesses should prepare to assess their risk profile

A decision is expected from the Supreme Court in the early part of next year on the holiday pay issues considered in Harpur Trust v Brazel. The judgment will probably affect holiday arrangements relating to PAYE temps, umbrella workers who work on an occasional basis, and zero-hour/seasonal workers.

Reminder of the facts

In a nutshell, this case was about a music teacher on a zero-hours contract who worked irregular term-time hours. The Court of Appeal found that she still accrued 5.6 weeks of holiday each year even though she did not work all year round. It also found that her holiday pay should have been based on an average week's pay (now based on a 52 working week average), times 5.6 weeks, rather than the usual 12.07% approach taken by many in the staffing industry. This meant that the music teacher was entitled to holiday pay that in fact was higher in value if compared to a full-time equivalent.

The Court of Appeal also emphasised that its decision related to the teacher as a "part year" worker, but it is not clear what this means. Does it capture PAYE temps, zero-hour and umbrella workers who work on an occasional basis? 

Implications for business

We think there will be a lot of publicity about this when the Supreme Court issues its decision – and this is understandably causing concern within the staffing industry.   

It is clear that PAYE temps, zero-hour and umbrella workers who work on an occasional basis will argue that the decision in this case applies to them – and they will be given plenty of support in sectors and workplaces where trade unions and employee representative bodies are active.   

So, what are the likely risks and liabilities for your business? We are helping businesses get ahead by strategising next steps and communication plans. In particular, we are assisting with:

  • what the likely risk profile is in practice – for some it might be high, but equally for others it may be low, depending on the workforce profile;
  • identifying steps that can be taken minimise the risk of claims;
  • the approach to be taken in assessing the potential quantum of holiday pay claims;
  • whether any amendments to contractual documents are needed;
  • whether changes to the communication around accrued holding, taking holiday and monitoring compliance should be taken
  • the impact on rolled up holiday pay (if relevant); and
  • whether any changes need to be made to staffing models in the longer term.

It is also inevitable that businesses will have queries from clients and workers alike. Therefore communication plans – to help to show the business is in control and on top of the situation – will be vital in reassuring clients and the market that a plan is in place, regardless of which way the Supreme Court decision goes.

If it would be helpful to discuss any of the above with our experts, or be given an insight into how the industry is currently addressing this issue, please do not hesitate to get in touch.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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