The Trust pay Ms Brazel on a monthly basis according to the number of hours worked in the previous month, but she is paid her holiday pay at the end of every term. When calculating Ms Brazel’s holiday pay, the Trust followed Acas guidance on casual workers which, at the time, recommended using the rate of 12.07% per hour worked (the “Percentage Method”). Ms Brazel argued that was not the correct calculation under the Working Time Regulations 1998 (“WTR”). She disagreed that her holiday pay should be pro-rated simply because she did not work a full year.

Ms Brazel’s claim for unlawful deduction of wages failed in the Employment Tribunal, but her appeal to the Employment Appeal Tribunal was successful. The Trust appealed to the Court of Appeal which dismissed the appeal. The Trust then appealed to the Supreme Court.

The question for the Supreme Court to decide was, by which method should Ms Brazel’s payments for annual leave be calculated? This raised an important issue about the statutory leave requirement for “part-year workers” – permanent workers who work for varying hours during only certain weeks of the year.

The Trust put forward various methods for calculating holiday pay, including the Percentage Method and the “Worked Year Method”. The latter method takes account of the fact that Ms Brazel does not work during school holidays. It uses the number of weeks she actually works (34 weeks) to calculate a percentage of the full working year (46.4 weeks). That percentage is then applied to the annual leave entitlement applicable to the full working year.

The Supreme Court found that these alternative methods were problematic. Firstly, they were very different from the statutory method set out in the WTR. Secondly, the calculations were very complicated. The Court noted that the statutory scheme could produce odd results but that does not justify wholesale revision of the scheme.

Importantly, the Supreme Court decided that the “Calendar Week Method” represents the correct implementation of the WTR and is fully compliant with EU law. Ms Brazel is entitled to 5.6 weeks’ paid leave which is taken in 3 equal tranches during the winter, spring and summer school holidays. This means that 1.87 weeks of each school holiday was treated as annual leave for which Ms Brazel was entitled to be paid. Under the Calendar Week Method, Ms Brazel’s holiday pay is calculated by first determining a week’s pay – her average weekly remuneration during the previous 12 weeks – and that figure is then multiplied by 1.87 to get the holiday pay she is due for the 1.87 weeks’ leave she took during each school holiday.

The Supreme Court held that even if the [...]]]> http://lawandlabour.com/part-year-workers-holiday-need-not-be-pro-rated-to-full-time-workers/feed/ 0 http://lawandlabour.com/holiday-pay-for-part-year-workers-need-not-be-pro-rated/ http://lawandlabour.com/holiday-pay-for-part-year-workers-need-not-be-pro-rated/#comments Sat, 10 Aug 2019 16:01:11 +0000 http://lawandlabour.com/?p=2669 Ms Brazel works as a music teacher for the Harpur Trust. She is employed under a permanent contract and only works during term time. Her hours of work depend on the number of pupils requiring tuition. Ms Brazel is contractually entitled to 5.6 weeks’ holiday, but the contract did not expressly state that her holiday entitlement should be pro-rated.

The Trust pay Ms Brazel on a monthly basis according to the number of hours worked in the previous month, but she is paid her holiday pay at the end of every term. When calculating Ms Brazel’s holiday pay, the Trust followed Acas guidance on casual workers by using the rate of 12.07% per hour worked. Ms Brazel argued that was not the correct calculation under the Working Time Regulations and produced a lower figure. She disagreed that her holiday pay should be pro-rated simply because she did not work a full year.

Ms Brazel’s claim for unlawful deduction of wages failed in the Employment Tribunal, but her appeal to the Employment Appeal Tribunal was successful. The Trust appealed to the Court of Appeal.

The question for the Court of Appeal to decide was, by which method should Ms Brazel’s payments for annual leave be calculated?

The Court of Appeal coined a new term to describe employees in Ms Brazel’s situation – “part-year workers”. The Court felt that it was not apt to call such employees “term-time workers” as that denoted employees who are only employed during the term, while Ms Brazel was employed all the year round, albeit she only worked during term time.

Importantly, the Court decided that the position of a part-year worker such as Ms Brazel was not the same as a part-time worker, so there was no need to apply pro-rating as one would with the latter type of worker. This meant Ms Brazel’s holiday pay should be calculated by first determining a week’s pay – her average weekly remuneration during the previous 12 weeks – and then multiplying that figure by 5.6. This would make Ms Brazel’s holiday pay 17.5% of her actual earnings as opposed to the 12.07% rate used by the Trust.

The result is that a part-year worker will get higher holiday pay than a full-year worker, but the Court did not consider this to be “unprincipled or obviously unfair”:

“the actual days from which they will be relieved, and the quantum of their holiday pay, will reflect their actual working pattern.” Court of Appeal

This case will have implications for employers of part-year workers, such as teaching institutions, as these workers may complain about the size of their holiday pay or bring claims for unlawful deductions. There is some comfort for employers that such claims have a retrospective limit of two years.

Any employers who currently use the 12.07% rate to calculate holiday pay for permanent part-year workers would do well to review their employment contracts and assess their potential litigation exposure. The benefit of moving to calculate holiday pay on the basis [...]]]> http://lawandlabour.com/holiday-pay-for-part-year-workers-need-not-be-pro-rated/feed/ 0 http://lawandlabour.com/uber-loses-worker-status-appeal/ http://lawandlabour.com/uber-loses-worker-status-appeal/#comments Mon, 13 Nov 2017 13:02:03 +0000 http://lawandlabour.com/?p=2535 Uber’s appeal against the decision of the Employment Tribunal that its drivers are workers has been unsuccessful as the Employment Appeal Tribunal (EAT) dismissed Uber’s appeal in its entirety.

For the background to the appeal, read our article on the Employment Tribunal judgment from October 2016.

The EAT appeal focused on the true relationship between the drivers and Uber London Limited. Uber had sought to argue that its relationship with the drivers was one of agency, but the EAT decided that the Employment Tribunal had been entitled to reject this characterisation as being incorrect. The EAT felt that it could not be said that Uber drivers were principals in an agency relationship because the arrangements were inconsistent with the drivers being in business on their own account. The fact that the drivers were controlled by Uber London was an indication that the drivers were not true business owners.

The EAT concluded that the Tribunal had not erred in either its approach or its conclusions. Uber had therefore failed to meet the high threshold required to show that the Tribunal’s decision had been perverse.

A second limb of the appeal was the question of when drivers could be considered to be at work. The EAT agreed with the Tribunal’s finding that the drivers’ obligation starts when:

However, the EAT noted that the question of a driver’s status between trips was a tricky one to answer, particularly if the driver worked for more than one operator at the same time. The amount of time a particular driver actually spent driving, and therefore working, would hinge on “fact and degree”.

It is almost a foregone conclusion that the decision will be appealed to a higher court, in keeping with the path trodden by other gig economy cases, such as that concerning Pimlico Plumbers.

CASE Uber BV and ors v Aslam, Farrar and ors, Employment Appeal Tribunal, 10 November 2017

The Tribunal found that Uber drivers were workers whenever three elements of their working arrangement were satisfied:

The Tribunal was critical of the lengths it felt Uber had gone to in order to disguise the true nature of its working arrangements with drivers, “resorting in its documentation to fictions, twisted language and even brand new terminology”. The Tribunal saw through this smokescreen to find the true relationship between Uber and its drivers was that of worker and employer.

Uber imposes numerous conditions on drivers…instructs drivers as to how to do their work and, in numerous ways, controls them in the performance of their duties. Employment Tribunal

The Tribunal provided several examples that ran counter to Uber’s view that the drivers acted as self-employed businessmen and which supported the drivers’ claims that they were workers operating under its control.  These included:

Once the Tribunal had decided that the drivers were workers, there was the second question of when drivers could be considered to be at work.  This was relevant to the questions of whether drivers were being paid according to NMW legislation and for calculating the holiday pay drivers would be due.

The Tribunal found that whenever the three employment status conditions were satisfied, the Uber driver could be considered to be at work for holiday pay purposes.   In considering the NMW, the Tribunal decided that Uber drivers did not carry out “time work”, but instead carried out “unmeasured work” so that the “relevant hours” when calculating the NMW would be any hours worked by the driver.

The drivers’ claims were brought against Uber B.V., whose headquarters are in Amsterdam, and its local subsidiaries Uber London Ltd and Uber Britannia. Despite Uber B.V. purporting to be the entity that had entered into contracts with the drivers, the Tribunal found that in reality the drivers were employed by Uber London as it was the main point of contact between Uber and its drivers.

This preliminary ruling is likely to be the first stage in what will inevitably turn into a long-running saga. The Tribunal’s judgment carries onerous financial implications that spell disaster for Uber’s business model and the wider gig economy. It is therefore expected that Uber will appeal the Tribunal’s judgment to a higher court.

CASE Aslam and ors v Uber B.V. and ors, 28 October 2016

On 10 November 2017, the [...]]]> http://lawandlabour.com/uber-drivers-are-workers/feed/ 0 http://lawandlabour.com/how-might-brexit-affect-employment-law/ http://lawandlabour.com/how-might-brexit-affect-employment-law/#comments Sun, 15 May 2016 10:26:02 +0000 http://lawandlabour.com/?p=2321 On 23 June 2016, a referendum will be held in the United Kingdom to decide whether this territory should leave the European Union (‘Brexit’). If Brexit were to take place, this development could have a significant impact on employment law.

Much of the legislation relating to employment rights has its foundation in European law. In addition, UK courts have to abide by the decisions of the European Court of Justice when interpreting any employment law that has its basis in EU law.

In the table below, we summarise which areas of law are likely to change.

Despite the concerns noted above, any changes are unlikely to take place immediately following Brexit. The rules governing EU membership mean it will take two years for the UK to leave the EU. The Government would therefore be more likely to retain current legislation for a period of time before making changes to individual legislation on a piecemeal basis as and when necessary.

“European Union flag” by Flikr user Yanni Koutsomitis used under Creative Commons Attribution 2.0 license