The Harpur Trust v Lesley Brazel
| Jurisdiction | England & Wales |
| Judge | Lady Rose,Lady Arden,Lord Hodge,Lord Briggs,Lord Burrows |
| Judgment Date | 20 July 2022 |
| Neutral Citation | [2022] UKSC 21 |
| Court | Supreme Court |
[2022] UKSC 21
Lord Hodge, Deputy President
Lord Briggs
Lady Arden
Lord Burrows
Lady Rose
Appellant
Caspar Glyn QC
Nathan Roberts
Catherine Meenan
(Instructed by VWV Solicitors LLP (Bristol))
Respondent
Mathew Gullick QC
Lachlan Wilson
Naomi Webber
(Instructed by Hopkins Solicitors LLP (Nottingham))
Intervener (UNISON)
Michael Ford QC
Mathew Purchase QC
(Instructed by UNISON Legal Services (London))
Heard on 9 November 2021
Lady Rose AND Lady Arden ( with whom Lord Hodge, Lord Briggs and Lord Burrows agree):
This appeal raises an important issue about the statutory leave requirement for part-time workers who may also be described as part-year workers, namely workers who work for varying hours during only certain weeks of the year but have a continuing contract throughout that year. These workers neither work the full number of hours worked by full time workers nor the full number of weeks worked by part-time workers. Their work is irregular. The issue is whether their leave entitlement is calculated on the same principle, proportionally, as full-time employees (which would mean that the weeks that they do not work reduce their entitlement) or whether their leave must be calculated ignoring those weeks. The latter would leave them with an entitlement which proportionally exceeds that of other employees. Nonetheless, the Court of Appeal held that the proper construction of the domestic law led to that result and further that such a construction was consistent with the applicable EU law.
Prior to the UK's withdrawal from the European Union, the statutory leave requirement was governed by the EU Council Directive 2003/88/EC generally referred to as the Working Time Directive (“the WTD”), and its predecessor, which were implemented in the United Kingdom by, in particular the Working Time Regulations 1998 (SI 1998/1833) (“the WTR”), which also conferred additional rights. The WTD was adopted pursuant to article 137 of the Treaty Establishing the European Community (“ article 137 EC”), now article 153 of the Treaty on the Functioning of the European Union. Article 137(2) EC empowered the Council to adopt directives setting minimum requirements for working conditions for gradual implementation by the member states. The obligation to implement the WTD and its predecessor was satisfied in the United Kingdom by the WTR. The WTR, as amended (inter alia) in 2007, provide that as from 1 April 2009 workers are entitled to 5.6 weeks' leave (or 28 days, whichever is less) rather than the four weeks provided for by the WTD. The additional 1.6 weeks is conferred only by UK law. The WTR were made under section 2(2) of the European Communities Act 1972 and they are preserved in UK law by section 2 of the European Union (Withdrawal) Act 2018 (“the Withdrawal Act”). They are therefore “retained EU Law” as defined by section 6(7) of that Act. By section 6(3) of the same Act, retained case law (that is, retained domestic and EU case law) continues to apply to any question as to the meaning or effect of retained EU law (see section 5(2), section 6(3) and section 6(7) of the Withdrawal Act).
The respondent, Mrs Brazel, is a visiting music teacher at a school run by the appellant, the Harpur Trust. The Harpur Trust accept that Mrs Brazel is a “worker” within the meaning of the WTR as they applied during the period covered by this appeal. She is therefore entitled to 5.6 “weeks” of paid annual leave in the leave year. The arrangement between the parties is that Mrs Brazel takes her annual leave during the school holidays, when she is not required to give lessons. That is in accordance with the decision of this Court in Russell v Transocean International Resources Ltd [2011] UKSC 57; [2012] ICR 188. There the employee was an offshore oil worker who worked two weeks on a rig and then had two weeks' break onshore. It was held that an employer could require an employee to take leave in a break period.
The Harpur Trust contend that a part-year worker's leave entitlement must be prorated further to take account of the weeks not worked. So, the issue is essentially one of statutory interpretation, and we set out the relevant provisions below. The Harpur Trust argue that the domestic provisions prescribing how to calculate holiday entitlement and holiday pay must be interpreted so as to comply with what it refers to as “the conformity principle”. That principle, they say, emerges from the case law of the Court of Justice of the European Union (“the CJEU”) interpreting the provisions of the WTD. The amount of annual leave should, in accordance with the conformity principle, reflect the amount of work that Mrs Brazel actually performs during the annual leave year.
The Harpur Trust run Bedford Girls School. Mrs Brazel started working at the school in September 2002. Mrs Brazel teaches pupils who want to learn to play the saxophone or clarinet. During the school terms, Mrs Brazel works different hours each week, depending on how many pupils need lessons in her instruments. She usually teaches between ten and 15 hours per week during term time but some weeks much less. During the school holidays she does not teach any lessons to the school pupils and is not required to work. She is paid only for the hours that she actually teaches in term time.
Mrs Brazel is currently employed under an employment contract dated 11 April 2011, and her claims for unauthorised deductions from her pay relate to periods between 1 January 2011 and June 2016. The schedule to her contract of employment sets out the role of the visiting music teacher. Her role includes teaching pupils, from complete beginners to those of a high standard, preparing them for exams and for concerts, festivals and competitions where appropriate. The contract provides that requirements for her services will depend upon a varying level of demand for individual personal tuition in her instruments. There are no minimum hours of work guaranteed to Mrs Brazel and she has no normal hours of work. Mrs Brazel's pay during the period with which we are concerned was £29.50 per hour and she was paid in arrears at the end of each month.
The contract provides at clause 27 that the annual leave year runs from 1 September to 31 August and that during the leave year Mrs Brazel is entitled to 5.6 weeks' paid leave. That leave must be taken during the normal school holidays or at such other times as are convenient for the school. Mrs Brazel has always been treated as having taken her annual leave entitlement in three equal tranches in the winter, spring and summer school holidays, that is to say, 1.87 weeks of each school holiday was treated as annual leave for which Mrs Brazel was entitled to be paid. Unused leave entitlement may not be carried forward to a subsequent leave year and there is no pay in lieu of unused leave except on termination of her employment. The contract confirms that there are no collective agreements which directly affect her terms and conditions: clause 52.
Before September 2011, Mrs Brazel's pay for the 1.87 weeks she was treated as taking during each school holiday was determined in accordance with section 224 of the Employment Rights Act 1996 (“the 1996 Act”), as is required by regulation 16 of the WTR which incorporates section 224 for this purpose. Section 224 defined “a week's pay” for this and several other purposes as the amount of Mrs Brazel's average weekly remuneration in the period of 12 weeks ending with the start of her leave period, ignoring any weeks in which she did not receive any remuneration. The Harpur Trust therefore worked out how much Mrs Brazel had been paid during the twelve term-time weeks prior to the school holiday, divided that total by 12 and paid her 1.87 times that weekly average.
As from September 2011 the Harpur Trust changed the calculation. Mrs Brazel was still treated as taking her annual leave entitlement in three equal tranches. But the Harpur Trust calculated Mrs Brazel's hours worked at the end of each term, took 12.07% of that figure and paid her the hourly rate for that number of hours. We will call this “the Percentage Method”. The Harpur Trust say that in calculating her leave entitlement in that way, they were following the method recommended by Acas in its guidance booklet Holidays and Holiday Pay for calculating the pay of casual workers. The relevant passage in the booklet states that if a member of staff works on a casual basis or very irregular hours it is “often easiest” to calculate holiday entitlement that accrues as hours are worked. 12.07% is the proportion that 5.6 weeks of annual leave bears to the total working year. The working year is the whole year (52 weeks) minus the annual leave (5.6 weeks) and so 46.4 weeks. 5.6 weeks is 12.07% of 46.4 weeks. The Harpur Trust therefore treated Mrs Brazel as entitled to 12.07% of her total pay for the term.
The relevant part of the guidance issued by Acas has now been rewritten. Furthermore, in 2020, subsequent to the decision of the Court of Appeal in this case, the Department for Business, Energy and Industrial Strategy issued guidance (see Holiday Pay — Guidance on calculating holiday pay for workers without fixed hours or pay) (“the BEIS Guidance”). There is a separate section in this document dealing with term-time and part-year workers, including those who, like Mrs Brazel, only receive pay during the periods when they are working and not during the non-working periods. The BEIS Guidance reflects the decision of the Court of Appeal in this case. The employer should not: (1) include in the holiday reference period any whole week in which no pay was...
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