Holiday pay

Holiday pay for VMTs and peris – the ISM fight goes on

On 9 November 2021, the case of Brazel v The Harpur Trust reaches the Supreme Court. This landmark case around holiday pay, funded by the ISM’s legal expenses insurance, could benefit thousands of workers across the UK. ISM Senior Legal Adviser Nerys Owen tells us more

Above: Senior Legal Adviser Nerys Owen All employees and workers are entitled to 5.6 weeks’ paid holiday a year. In this feature, we focus on holiday pay, starting with the Brazel legal action and why it matters. The issue at the heart of the Brazel case – the widespread practice of pro-rating the holiday pay of visiting music teachers (VMTs) because they are not contracted to teach during the school holidays – is just one of several holiday pay problems routinely brought to the ISM’s in-house legal team by our VMT and peri members. These include the use by schools of ‘self-employment’ contracts to avoid statutory obligations such as holiday pay, problems working out what should be included in a week’s holiday pay and how this should be calculated, and holiday pay hidden inside the hourly rate. Each of these issues is addressed briefly below.

Left (bottom): Supreme Court Photo:iStock The ISM’s history with the Brazel case

ISM member Lesley Brazel works part-time, teaching clarinet and saxophone at an independent school operated by her employer, The Harpur Trust. As with many VMTs and peris, Mrs Brazel’s termly working hours depend on how many pupils need lessons on her instruments. Mrs Brazel has a permanent ‘zerohour style’ employment contract, so there are no guaranteed minimum hours, and she is paid only for work done. Mrs Brazel first sought the ISM’s help back in 2013, when the ISM in-house legal team took up her complaint about how her holiday pay was calculated and helped her bring a formal internal grievance. That grievance was dismissed because the Harpur Trust maintained that they were entitled to pro rate her holiday pay to term-time only, since she didn’t teach during the holidays. They based their approach to holiday pay on Advisory, Conciliation and Arbitration Service (ACAS) guidance (since withdrawn) designed for working out the holiday pay of casual workers. Relying on this guidance, the Harpur Trust calculated Mrs Brazel’s earnings at the end of each term and paid her one-third of 12.07% of those earnings. This ACAS guidance is the source of the ‘12.07%’ figure that still appears in many members’ contracts, even though use of this method of calculation for term-time only workers is no longer lawful following the Court of Appeal ruling in Brazel. The basis for the 12.07% figure is 5.6 weeks’ holiday, divided by 46.4 weeks (that is, 52 weeks minus the 5.6 weeks’ leave). In March 2015, Mrs Brazel launched an employment tribunal claim under the Working Time Regulations. Since then, it has taken eight years – and a good many stages along the way – for this case to reach the Supreme Court. The ISM’s legal expenses insurance – a benefit provided to all members – has funded Mrs Brazel’s case throughout. Since the ISM was created in 1882, we have been working to protect the rights of those working in music, but this marks the first time we have supported a case all the way to the Supreme Court. We salute Mrs Brazel’s determination, and we feel privileged to have been able to stand behind her in this way. This case is especially significant because it will impact not only on the holiday pay of VMTs and peris, but also on holiday pay rights for thousands of others with irregular hours who work term-time only, such as school catering staff and playground assistants.

Right: Lesley Brazel

Where are we now?

The fight goes on. Despite the Court of Appeal victory in Mrs Brazel’s case, more than two years ago, confirming that just like all other workers, ‘term-time only’ workers must be paid 5.6 weeks’ paid holiday a year, a mid-2021 ISM survey of VMTs and peris found widespread refusal to comply with the law on this issue. Just under a third (30.77%) of VMTs and peris who identified as employees or workers told the ISM that they knew or were fairly certain that their holiday pay was still being pro-rated to term-time only, while only 7.08% were confident that they were getting their correct allocation of 5.6 weeks. Meanwhile 36.31% reported getting no holiday pay at all. Employers are clearly waiting to see what the Supreme Court decides before changing their behaviour. Judgment is expected in early to mid-2022.

Employment status and why it matters

Only employees and workers are entitled to statutory holiday, so one important way in which many schools have sought to escape these obligations (as well as other key statutory responsibilities such as pensions auto-enrolment contributions) is for their VMT and peri workforce to be classified as ‘self-employed’. In our latest ISM survey of VMTs and peris, 41.15% of participants described their employment status as ‘self-employed’. The genuinely self-employed have very few statutory rights. A troublingly large proportion of the VMTs and peris who approach the ISM legal team with contract documents that describe their status as ‘selfemployed’ are more likely, on closer examination, to be workers, with statutory worker rights, including a right to holiday pay. Confusingly, there is a difference between employment status for tax purposes and employment status for statutory worker rights. HMRC does not recognise the category of ‘worker’ and uses only two classifications: employment (which is subject to PAYE tax at source) and self-employment (which is not). You can be legitimately classified as self-employed by HMRC, paying tax on this basis, while at the same time qualifying for statutory worker rights. As regards worker rights, there has been a fundamental shift in this area of law, following the February 2021 Supreme Court ruling in the case of Uber v Aslam. As a result of that ruling, employment tribunals must take no notice of an employer’s carefully drawn up contract documentation when deciding whether or not someone qualifies for statutory rights at work. Instead, the focus must be on what really happens day to day. Another important ruling for VMTs and peris is the tribunal case of Scott v ChigwellSchool. Mrs Scott, a visiting singing teacher, was judged to have worker status. The case is not binding because it is a decision of the employment tribunal, but it is still important, because Mrs Scott’s working arrangements are common across the sector. Among a range of relevant factors, it is significant that Mrs Scott was found to be a worker even though she invoiced the parents who paid her direct, and this was because the school dictated what she was allowed to charge – a common practice among bursars. This practice is also vulnerable to attack as unlawful price fixing, because it removes from the parent the choice to opt for the cheapest from a range of ‘business providers’.

How much holiday pay should you be getting?

Even if the school accepts that you are an employee or a worker, there can still be problems working out how much holiday pay you should be getting. Statutory holiday pay calculations are based on a ‘week’s pay’,

so to work out your annual holiday pay entitlement, you first need to calculate a ‘week’s pay’ and then multiply this by 5.6 weeks. Where teaching hours are regular and you have no other work commitments, such as regular ensembles, working out your holiday pay should be relatively straightforward. For example, if you have been timetabled to give 10 hours’ teaching per week across all three terms of the academic year at an hourly rate of £30 and you have no other regular work commitments, your holiday pay entitlement for the year will be £1,680 (=10 x £30 x 5.6). However, changes to pupil numbers over the year can mean that your weekly pay does not remain stable across all three terms. In particular, many VMTs see their pupil numbers fall in the summer term during GCSE and A-level year. The law on calculating the holiday pay for people with irregular working hours and pay has recently changed. Since April 2020, where working hours and pay are irregular, the law requires employers to base their workers’ holiday pay on their average pay over the previous 52 weeks. Weeks when you were paid nothing at all (for example, school holidays) must be excluded, and replaced by an earlier week. Weeks when you were paid a smaller amount than usual because you were off sick or on a statutory leave, such as maternity leave, must also be excluded. This is because you should get paid the same when you’re on holiday as when you’re at work. The employer should only count back as far as needed to reach 52 weeks of normal pay – up to the previous 104 weeks, but no further. In straightforward cases, this means that schools will be able to calculate a week’s pay by working out average weekly pay across all three terms and then multiplying that figure by 5.6 to give a week’s pay.

What pay counts towards a week’s pay?

Another live issue for VMTs and peris is the question what pay should be included when working out a week’s holiday pay. Holiday pay should be based on your normal pay when working, and this includes any usual or regular payments, including regularly worked voluntary overtime. This means that on top of hourly pay for teaching, the school should add other regular pay, such as running group ensembles or accompanying exams. Holiday pay must also reflect income earned for performing contractual tasks, such as attending safeguarding training or INSET days.

Rolling up holiday pay inside the hourly rate

Another common problem in this sector is the practice of including holiday pay within the hourly rate (known as ‘rolled up’ holiday pay). Employers are not allowed to simply designate part of your normal pay as ‘holiday pay’. Instead, there must be an extra payment for holidays, on top of the pay for work done. And you must be able to see clearly, from the information provided by your employer, such as your contract documentation and your payslip, precisely how your holiday pay has been worked out.

What to do if you think you are being underpaid holiday pay

ISM members who think they are not receiving their full holiday pay entitlement should contact the ISM legal team for advice by email at legal@ism.org. There is currently legal debate over how far back these claims can go, but the absolute maximum that can be recovered is two years of underpayment. Even in cases where a school’s liability is clear, good record keeping is likely to be very important. There are three months (less one day) in which to bring a claim, counting from the most recent underpayment. Many of the VMTs who approach the ISM legal team are not particularly interested in pursuing back payments of holiday pay. Instead, what they really want is to see their school acting lawfully and responsibly moving forward. See page 10 for more information on our conference about music education, which includes the session ‘Legal essentials’

The ISM’s 2022 fees survey

Our annual survey of music teaching, examining and accompanying rates is now available online. The continued disruption to the industry caused by COVID-19, which meant that much work was cancelled or moved online, has been taken into account within the questions, and we will use your responses to deliver a comprehensive report of the situation this year. Your participation is incredibly important because the more musicians who complete the survey the more authoritative the survey results will be as an indicator of what musicians have been charging. To complete the survey visit: surveymonkey. co.uk/r/8XJ5CR2 The deadline for submissions is 17 December 2021 and the results will be published in spring 2022.