Holiday pay and pensionable salary questions

[Newmember200]

Hello all. A new member needing assistance.

In our company a lot of people are employed on a shift rotation. In two week cycles it's day, back and night shift. There is 33% shift allowances for back and night shift with zero for day shift. People are paid an average of 22% to keep all 12 monthly salary payments equal. All holidays are paid with the average 22% allowance.

We are all very busy and most people do a lot of additional overtime.

Here are my questions.

1) Should the people who work very regular overtime have this factored into their holiday pay?


2) The pensionable salary the company use for our, and their contribution, is based on basic salary without even the set shift allowances.

Should we expect at least our shift allowance to be taken into account?

Thanks in advance.

 

[Newchodge]

If you work regular overtime the holiday pay should (currently) be based on the average of the previous 12 weeks. (There is talk about this being changed to an annual average).

Suppose you work 35 hours per week @ £15 per hour. Every week you work 10 Hours overtime. 45 hours @ £15 = £675 per week contracted @ 35 hours. £675/35 = £19.29 per hour, so the holiday pay should be based on £19.29 per hour, not £15 per hour.

 

[Newchodge]

For pensionable pay, have a look at the pension scheme details.

 

[Newmember200]

Thank you.

There is no grey area, or at company discretion, about the holiday pay? Is the law as clear as holiday pay must be the average of the previous 12 weeks?

What about backdating it? Is that a grey area or should it be requested and given for years previously?

Our current contract makes clear the pensionable salary is the base salary. However, presently the company is going through a process of reviewing all benefits and trying to bring everyone into the same perks and aligned to the market.

Then they suggested that offshore workers should have their pensionable salary calculated at 150% of their base salary due to the nature of their earnings. Their base salary is often half what their earnings end up with day rates, overtime etc. However working on a shift pattern and expected to cover a lot of over time it is the very same with manufacturing.

 

[Newchodge]

There is no grey area, or at company discretion, about the holiday pay? Is the law as clear as holiday pay must be the average of the previous 12 weeks?

It depends on the nature of the variable pay but, broadly speaking, yes.

If you haven't been paid proper holiday pay you can take a tribunal claim within 3 months of the failure. If there have been a series of failures, none of which was separated by 3 months, you can claim for those too.

 

[FD Capital]

The 12 weeks rule is EU law / rules you need to count back to work out the average. The idea being that a week's holiday should be paid no differently than the period of work most close to that period.

 

[Employment Law Clinic]

The 12 weeks rule is EU law / rules you need to count back to work out the average. The idea being that a week's holiday should be paid no differently than the period of work most close to that period.

Excuse me for being pedantic, but this is simply not true!


The twelve-week rule is found in UK legislation – sections 220-224, Employment Rights Act 1996 (ERA). This determines how the “rate of a week’s pay” should be calculated in instances where this is not clear – using the previous 12 weeks as an average.


European laws & judgments simply say that an employee should be not be paid less during holidays, and to ensure an employee doesn’t suffer any financial loss, overtime & commission should be included in the calculations. However, there is no European/ECJ case law to determine what a week’s pay is/how to calculate this from a variable weekly amount, and therefore while in the UK, (in the absence of any other authority) the tribunals & courts follow the legislation at 220-224, ERA, there is a strong feeling among many employment lawyers that this would fall foul of European law if or when it is ever tested at the ECJ.



Karl Limpert