The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
Another case that might challenge holiday-pay practice for variable hours staff has been decided by the EAT.
In the case of Brazel v the Harpur Trust, the EAT concluded that a Music Teacher engaged on a term-time-only contract was still entitled to the same statutory holiday pay as someone who works for 46.4 weeks per year. The EAT concluded that it wasn’t appropriate for her holiday pay to be pro-rated by the employer using the 12.07% approach set out in ACAS guidelines.
The EAT concluded she was entitled to 5.6 weeks holiday calculated in accordance with the provisions of the Employment Rights Act (based on her average week’s pay in the preceding 12 weeks in which she had worked), effectively 17.5% of her annual earnings. We understand there is going to be an appeal.
The decision did not expressly consider the accrual of holiday for variable hours staff nor the approach to the accrual of leave under the Regulations for variable hours staff. The claimant’s contract gave her the right to 5.6 weeks’ holiday, and we are aware that many providers apply the 12.07% principle in terms of accrual.
Who will this decision impact?
We consider the decision will affect everyone who works less than full time, in a flexible way, where their holiday pay (as opposed to the amount of leave they accrue) is capped at 12.07% of their earnings.
With fixed, part-time hours each week, their 5.6 weeks leave entitlement would equate to their standard working week, so the current approach wouldn’t change.
The impact of the decision could be significant for zero- hours workers depending on how holiday pay has been calculated under their contract to date.
Take the following example of how the case could apply in practice for a zero-hours with a standard holiday leave entitlement of 5.6 weeks. The zero-hours worker works full time for 12 weeks in a year. They would still be entitled to 5.6 weeks holiday paid at the amount of the average pay in the 12-week period.
Why have the EAT got to this conclusion?
In short, there is nothing within the Working Time Regulations that requires holiday pay to be pro-rated.
His Honour Judge Martyn Barklem, stated “I am unable to distil…any support for the proposition accepted by the ET that there is a requirement to carry out an exercise in pro-rating in the case of part-time employees, so as to ensure that full-time employees are not treated less favourably, or to avoid a “windfall” for term-time only workers.”
What isn’t clear from the judgement is whether the judge was also referencing the approach of pro-rating to the accrual of holiday entitlement.
We believe the case can be argued solely to apply to the calculation of holiday pay. The approach to the accrual for staff with variable hours has always been difficult given that holiday entitlement under the Working Time Regulations is expressed in terms of 5.6 weeks of leave and the EAT didn’t explore this issue.
As a result, we have the view that the case is not authority that an employer cannot cap the accrual of holiday at 12.07% of hours worked (a practice that is common for zero-hours staff). Sadly, the EAT did not expressly distinguish between the approach to the accrual of holiday leave (which we would argue should be pro-rated and should be capped) and to the calculation of holiday pay, which we accept should be based on average earnings in the previous 12 weeks worked.
So what should you do?
You will need to check how you have been calculating holiday leave and pay for any zero hours, term-time only or other staff with flexible hours, to check the extent of your potential exposure in light of this decision. This will help you decide whether you consider it is reasonable to change the approach to the calculation of holiday pay for anyone who is not full time and who does not have fixed hours. We would suggest taking legal advice specific to your situation if you have not been calculating holiday pay based on the previous 12 weeks income at the point leave is taken.
For more information on the issues raised in this article, please contact Matthew Wort.
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
One change proposed by the Building Safety Bill is the introduction of a duty holder regime, which will see statutory responsibility for the safety of higher risk buildings placed on key individuals
Throughout this pandemic, the Competition and Markets Authority (CMA) has been publishing various “Statements on Coronavirus” (Statements) which provide guidance on consumer rights during this time.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Sometimes half an hour at a conference gives you the reality that has been staring you in the face all along. That was my experience watching “Change is on the Horizon”
Following our recent e-briefing on Possession Notices, Helen Tucker and Emilie Pownall from our housing litigation team discuss the impact of the changes on social landlords.
Not only has the possession stay been extended until 20 September, the notice periods to be given to tenants has been extended in certain circumstances with some important exceptions.
The Court has confirmed that a party cannot withhold its consent in order to re-write the original bargain.
Following the Grenfell Tower tragedy, building safety continues to be a key concern for social housing providers and their residents.
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