National Minimum Wage: Term Time Workers

• Law Firm: Birketts
• Subject Matter: Employment and HR, Contract of Employment, Employee Benefits & Compensation
• Author: Ms Liz Stevens
• Published date: 10 February 2023

The recent Supreme Court decision in the case of Harpur Trust v Brazel [2022] UKSC 21 concerned the calculation of statutory holiday and pay, under the Working Time Regulations 1998, for a term-time only teacher.

The Employment Appeal Tribunal has handed down its decision in a case concerning the entitlement of a term-time only learning support assistant to receive the national minimum wage (NMW); and whether the pay calculation for NMW purposes should include hours falling outside the school term.

Lloyd v Elmhurst School Limited [2022] EAT 169

Facts of the case

The claimant, L, was employed as a part-time learning support assistant at a school. She worked three days a week during term-time and was paid her salary in equal monthly instalments. The contract did not state her hours of work, her salary or the rate of pay for school holidays. It stated that she was "entitled to the usual school holidays as holidays with pay".

L brought a claim for unlawful deductions from wages on the basis that her annual salary ('8,568) was below the applicable rate of the NMW for her hours of work.

It was accepted that L was employed, for the purpose of the NMW Regulations, in 'salaried hours work' in that she was paid an annual salary, in equal instalments, for a basic number of hours. The issue in question was what the basic number of hours was and whether it included hours during the school holidays.

She claimed that as a salaried hours worker, her basic hours should be calculated over a period of 52 weeks (including all the school holidays). The school maintained that her hours should be calculated over a period of 40 weeks, which was the total number of term-time weeks plus her statutory holiday entitlement. This was the period that HMRC had previously determined that employees at the school were paid in respect of, and had found no breach of NMW requirements.

The claim was dismissed by the employment tribunal, which held that L's basic hours for the purpose of calculating her NMW entitlement were 21 hours a week, over 40 weeks. It found that L only in fact worked during the school terms, meaning that the period during the school holidays did not count as working activity (other than her statutory holiday entitlement). This meant that her pay had not fallen below the rate required under the NMW Regulations.

EAT decision

The EAT upheld L's appeal. Under the NMW Regulations, her basic hours had to be calculated by reference to her employment contract. This should...