Variable Hours Holiday Entitlement: How Leave Balance Implements Brazel v Harpur Trust

The Supreme Court’s ruling in Brazel v Harpur Trust [2022] UKSC 1 fundamentally changed how UK employers must calculate holiday entitlement for part-year and variable-hours workers. The widely-used 12.07% accrual method is now unlawful for these workers — and the Employment Rights Bill is making the situation even more complex. This guide explains what changed, why it matters, and how Leave Balance handles it automatically.

What the Brazel Ruling Actually Means

Before Brazel, many UK employers calculated holiday entitlement for part-year and zero-hours workers using the 12.07% method:

Holiday entitlement = Total hours worked × 12.07%

This formula derives from: 5.6 weeks ÷ (52 weeks - 5.6 weeks) = 12.07%

The problem? It’s mathematically wrong for workers who don’t work every week.

The Court’s Decision

The Supreme Court held that:

1. Part-year workers are entitled to 5.6 weeks of leave — not a pro-rated fraction
2. The correct method is to calculate average weekly hours over the statutory reference period (52 weeks since April 2020)
3. Weeks with no work and no pay are excluded from the reference period — you count only working weeks

This means a term-time worker who works 30 weeks per year gets the same 5.6 weeks of entitlement as a full-time employee — calculated on their actual average hours across those 30 weeks, not divided by 52.

Why 12.07% Produces the Wrong Answer

Consider a term-time teaching assistant working 20 hours per week for 30 weeks (22 weeks off):

• 12.07% method: 30 weeks × 20 hours × 12.07% = 72.4 hours = 9 days (at 8h/day)
• Brazel method: 5.6 weeks × 20 average hours = 112 hours = 14 days

That’s a 56% shortfall — and a significant tribunal risk.

The Implementation in Leave Balance

We’ve added a Variable Hours calculation method to Leave Balance that automatically applies the Brazel formula. Here’s how it works:

How It Calculates Entitlement

For each employee with a variable-hours leave type, Leave Balance:

1. Looks back 52 weeks from the calculation date
2. Identifies working weeks — weeks with at least one attendance record showing worked_minutes > 0
3. Calculates average weekly hours — total hours worked ÷ number of working weeks (not 52)
4. Applies the formula: 5.6 weeks × average weekly hours = entitlement hours
5. Converts to days using the employee’s fixed daily hours (or account default)

Example: Term-Time Worker

• Reference period: Last 52 weeks
• Working weeks: 30 (22 zero-weeks excluded)
• Total hours worked: 600 hours
• Average weekly hours: 600 ÷ 30 = 20 hours
• Entitlement: 5.6 × 20 = 112 hours = 14 days (at 8h/day)

The system automatically excludes weeks with no attendance — no manual calculation needed.

New Starter Handling

For employees with less than 52 weeks of data, Leave Balance uses all available working weeks. The formula naturally pro-rates:

• Employee starts in month 3 with 10 weeks of data
• Works 30 hours per week across those 10 weeks
• Entitlement: 5.6 × 30 = 168 hours ÷ 8 = 21 days

No special configuration required — it just works.

Setting Up Variable Hours Leave Types

In Leave Balance, you can configure any leave type to use variable hours calculation:

1. Go to Leave Policies → Leave Types
2. Edit or create a leave type
3. Under Holiday calculation method, select Variable hours — statutory 52-week average (Brazel-compliant)

The system’s balance calculations automatically switch from the configured cycle_days_allowance to the attendance-derived entitlement for these leave types.

Note: Existing accounts using the standard fixed_entitlement method are unaffected. The variable hours option is only activated when you explicitly configure a leave type to use it.

What Shows in the Balance Display

When viewing an employee’s balance for a variable-hours leave type, you’ll see an indicator showing the calculation basis:

• ”ⓘ variable” — indicates entitlement is calculated from attendance records
• Hover tooltip shows: working weeks, average hours, reference period details

This helps HR managers understand why the entitlement figure differs from other leave types.

What Employers Need to Do Now

1. Audit your workforce — identify employees on zero-hours contracts, term-time arrangements, or irregular hours
2. Review current calculations — check if you’re using the 12.07% method (which is now non-compliant for variable-hours workers)
3. Update leave types — switch relevant leave types in Leave Balance to use the Brazel-compliant variable hours method
4. Check your software — if your current system doesn’t support this, you may be exposed to tribunal claims

The Employment Rights Bill Complication

The government’s Employment Rights Bill (expected 2026-2027) will reintroduce the 12.07% method as a statutory option for irregular-hours and part-year workers. This creates a transitional period where:

• Current law: Brazel method applies — 5.6 weeks based on 52-week average
• Post-reform: 12.07% accrual or rolled-up holiday pay become legally permissible options

Leave Balance will continue offering the Brazel-compliant method as the default — it’s safer and more generous, so it protects you regardless of how the legislation evolves.

Summary

The Brazel ruling means you cannot use a one-size-fits-all 12.07% accrual rate for part-year and variable-hours workers. Holiday entitlement must be calculated as:

5.6 weeks × (total hours worked ÷ working weeks in reference period)

Leave Balance implements this automatically — just configure your leave types to use variable hours, and the system handles the rest using actual attendance data.