Holiday pay and on call allowance

[loz]

For several years I have claimed a small daily "on call" allowance in addition to my salary, reflecting the contracts I cover for my employer and that I am their only employee for about 150 miles. Effectively I am on call 24/7, and while this is generally not onerous and doesn't prevent me doing things like going to the pub (enquiries can on the whole be dealt with over the phone or next day), the fact remains that I am "expected" to be available by both the company and their clients.

 

To date, when I have gone on holiday I have not claimed this allowance for those days - I am clearly not available for work so logically can't be on call - and the company have never said a word about this. Reading around recently though, it seems like my holiday pay should reflect my normal pay. The on call payment is marked as such on my payslip, it isn't part of my salary, but I do rely on it - especially as I haven't had a pay rise in 6 years!

 

I read on this page: http://www.sherbornesllp.co.uk/2011_06_20.html

The Advocate General has stated that a week's holiday pay must correspond with the workers normal remuneration. In short, this means that holiday pay must take into account basic wages, and any other consideration whether in cash or in kind which the worker receives. This appears to include bonus's and ex-gracia payments as well as allowances for overtime and shifts.

Is this correct? Should I be writing to Payroll with a breakdown of this missing pay?

 

Thanks as ever for your help,

Loz

[Gbarbm]

The Advocate General has stated that a week's holiday pay must correspond with the workers normal remuneration. In short, this means that holiday pay must take into account basic wages, and any other consideration whether in cash or in kind which the worker receives. This appears to include bonus's and ex-gracia payments as well as allowances for overtime and shifts.

 

I think you've answered your own question Loz; this seems a pretty definitive answer to me.

I would be inclined to check your contract or written particulars if engagement and staff handbook to see if it specifically mentions this. If not, write to HR/payroll or your manager (whatever the escalation route is in your company) advise them that your "normal" pay whilst on holiday should include your on call allowance, request that you would like it repaid to you and see what they come back with.

[loz]

Thanks for your reply - I added up the days I missed out on this allowance due to taking holiday and it comes to over £2000 since the start of 2007! Some days are weekends which aren't part of my 20 days per year, however they were consecutive to holidays I did take so IMHO I am entitled to be paid them.

Forgot to dig out my contract this morning..

[Gbarbm]

Well when you get the contract, come back here and we can go through it and see what details it provides (you'll probably need the employment law specialists on the forum at that stage)

[elche]

Hi Loz,

 

Hmmmm now this is interesting. We have looked at this on a past post in some detail (http://www.consumeractiongroup.co.uk/forum/showthread.php?176506-Working-more-than-my-contract-consistantly.)

 

There are 2 elements to your question:

 

a) How much leave are you entitled to?

b) How holiday pay should be calculated when such leave is taken?

 

In respect of point (b), I just wanted to add one caveat to the above.

 

Let's look at the law. A worker is entitled to be paid for any period of leave at the rate of a week's pay for each week of leave. Sounds simple right?

 

A week's pay is calculated, as SW rightly says by WTR (reg 16) referencing you to ERA 1996 ss 221-224

 

This means that, "...where an employee has normal working hours, overtime only qualifies as part of a week's pay where the overtime is fixed under the contract of employment. The effect is that only contractual hours are included and, for example non-contractual overtime hours are not. This can lead to situations where, although the employee regularly works substantial periods of overtime, pay while on holiday is based upon the lower number of contractual hours.".

 

See for example Bamsey v Albion Engineering [2004] ICR 1083 - employee worked on average 58 hrs per week only received hol pay bassed on contracted 39 hours per week.

 

The starting point is - Are you, in law, an employee with normal working hours who regularly works non-contractual overtime or genuinely an employee with no normal working hours? If the later then you should get a 12 week average

 

NB - Of course I do note that your case is not exactly mirrored by the above as Bamsay related to overtime and your seems to relate to, 'an on call allowance'

 

AND it is noted that since I wrote the original post above some complicated things have happened. I'll try not to bore you but since then this area has received judicial attention in the BA case where the UK Supreme Court asked for guidance from the CJEU

 

The questions put relate to the extent to which the Directives define requirements as to the nature and/or level of payments required to be made in respect of annual leave, and in particular whether the rate of payment must correspond precisely to, or be broadly comparable to the worker's 'normal' pay, and if so how such a concept should be assessed.

 

The answer proposed by Advocate General Trstenjak was that holiday pay, both under art 7 WTD and under the Civil Aviation Directive, are to be calculated in accordance with national legislation and/or practice, but that:

 

'' … holiday pay must, in principle, be determined in such a way as to correspond to the worker's normal remuneration''

 

and that in particular, where the level of remuneration varies (as in the instant case, because pilots' pay is supplemented by allowances for flying time and time away from the home base), a worker is entitled to holiday pay 'corresponding to his average earnings' based on 'a sufficiently representative reference period'.

 

However in the UK we don't use the Working Time Directive directly (as such) to say what the law is on holiday pay but we use the Working Time Regulations and a consequential statutory formula in the ERA 1996.

 

"One consequence of the requirement to use the ERA 1996 formulae for calculating a week's pay is that significant elements of actual remuneration may be excluded from consideration in the calculation, particularly so if the worker is paid commission in addition to a salary"

 

So now it appears to me that we are in some flux in this area, as the court could or could not follow the advocate's opinion, and this relates to employees (pilots) who are covered by a slightly different law, but nonetheless,"... has implications outside the aviation sector both for those whose working time is governed by other sector-specific regulations and for the calculation of payment annual leave under the Working Time Regulations where currently payments such as non-contractual but regularly paid overtime payments are excluded." http://www.oldsquare.co.uk/news/1/?c=30224

 

Of course all the above only applies to statutory holiday pay (i.e. the 28 days for most people), and not any right to contractual holiday pay.

 

How are these shift allowances described in your contract? and how much holiday entitlement do you get each year?

 

Che

Edited June 1, 2012 by elche

[loz]

Hi elche,

It does all seem clear as mud doesn't it... anyway I dug my contract out, which is a company standard one dating from 2004 - it sets out several things which have since changed (though no new contract has been issued) including my salary and line manager.

Your normal hours of work will be dictated by the shift roster in effect, but will not exceed 162.5 hours per month on average. Each shift allows for a minimum of an hour rest period per day.

In certain circumstances it may be necessary to adjust or exceed these hours in order to ensure that your duties in accordance with the terms of the employment are properly performed.

My paid holiday entitlement is 20 days plus 8 statutory holidays.

 

We also have a "staff handbook" which is updated occasionally, and although it does not form part of our contract of employment, we must comply with its contents. In here I have found this:

When on annual holiday you will be paid at your basic rate of pay plus your fixed rate shift premiums, if applicable.

So my question is, does my "on call allowance" count as a "shift premium"?

[Gbarbm]

I'm sure Elche will confirm or deny this, but to me it seems preety clear cut;

 

"When on annual holiday you will be paid at your basic rate of pay plus your fixed rate shift premiums, if applicable"

 

I would say the on call counts as a fixed rate shift premium.

 

I would certainly be inclined to hoist the flag up the flagpole and see who salutes it! by that, I mean write to your employer requesting the payment of it and see what they comeback with!

[elche]

Hi Loz,

 

Sorry for taking so long to get back to this.

 

It's been a long day and I would like to check more on this as I'm currently being driven mad by ss.221-229 of the ERA 1996

 

Would you say you worked, "....under the contract of employment ..... to work during normal working hours on days of the week, or at times of the day, which differ from week to week or over a longer period so that the remuneration payable for, or apportionable to, any week varies according to the incidence of those days or times."?

 

i.e. did the times of the shifts vary? and did your weekly pay vary?

 

Che

[loz]

I usually work 9-5 but this is not specified in my contract, and my basic pay is based on 37.5 hours per week. I make my hours a little flexible depending on what I am dealing with and where I am working. I find myself working overtime (and claiming for it) fairly regularly so it could be said that my hours and pay vary.

 

Can't recall when the policy change was implemented but some time last year the company stopped paying for overtime worked during "normal shift days", giving time in lieu instead. Overtime worked on "days off", weekends in my case, is still paid.

 

I haven't started the conversation with my manager yet, wanted to get my head round it properly first!

Thanks again elche

[elche]

Loz,

 

Once again sorry for the delay in replying work has been crazy.

 

I do not want to overcomplicate this (too late me thinks), but the way I see it there are 2 ways to look at your claim:

 

a) The way the law is worded gives us a formula for calculating holiday pay depending on different classes of worker and via this statutory formula you have been consistently underpaid holiday pay and / or

 

b) Your contract on the interpretation of its terms provides you with a contractual rate of holiday pay that exceeds the statutory amount, and you have consistently been underpaid this

 

Both of the above claims could be pleaded as a deduction of wages, and as such you could in theory link a series of deductions (one every 3 months) to make a chain going back 6 years (me thinks).

 

Whether you decide to go route a or b (you could plead both in a statement of claim), the starting point will be to informally ask for this, then formally ask for this e.g. a grievance, then if not settled internally claim in a tribunal or (if relevant) a county court.

 

If you claim against your employer and stay in the job, whilst in theory protected from reprisal, in reality your relationship with your employer is unlikely to be the same.

 

Thus, if your still following this thread, I have to ask, "Are you going to try and claim this?"

 

Che

[loz]

Hi Che,

I think I am going to try this... I want out anyway so if everything goes wrong it's not so bad - as long as I can find another job!

 

Cheers

Loz

[elche]

Hi Che,

I think I am going to try this... I want out anyway so if everything goes wrong it's not so bad - as long as I can find another job!

 

Good on ya Loz. What do you think you will do initially some kind of letter asking for the money e.g. a grievance or straight demand?

 

Che

[loz]

Kinda informal at first I think, give them chance to discuss this amicably. My manager is visiting site next week (first time in a year!) so I'll see what he has to say then.

[elche]

Kinda informal at first I think, give them chance to discuss this amicably. My manager is visiting site next week (first time in a year!) so I'll see what he has to say then.

 

Sounds a reasonable first step. Best of luck, and do let us know how it goes.

 

Che

[loz]

I made an error, thankfully before I put the question to my manager... this morning while I was looking for something else, I found a revised "Particulars Of Employment" dated 2008 (!) - No idea why I didn't file this properly, but it's signed and all that..

 

It is more personalised (general stuff is in the Staff Handbook as mentioned earlier), including my normal working hours which are stated as M-F 9-5:30.

Also it says

When on annual holiday you will be paid at your basic rate of pay. Shift premiums will not apply.

I feel like my theory may have a hole

[Gbarbm]

Shame! That, as they say, is that.

[loz]

Argh, the handbook says

When on annual holiday you will be paid at your basic rate of pay plus your fixed rate shift premiums, if applicable.

which contradicts my POE :???:

[Gbarbm]

Well that seems to contradict the other statement doesn't it!

[elche]

Argh, the handbook says

which contradicts my POE :???:

 

Contra proferentem?

 

Advantage you me thinks as regards the purely, "on the contract as it is" argument..

[loz]

Company response to my initial query, which I sent before I went on hols:

Call out is not a fixed rate shift premium it is a variable allowance and not contractual like shift premium.

 

Thoughts anyone?

[loz]

I came across Neal vs Freightliner (tribunal), which I have not seen mentioned on this forum, and I think it will help me with this. I appreciate that there is an appeal pending by Freightliner, and that the verdict of the tribunal is not binding, but this could net me around £3000 going back to 2007.

It was held that holiday pay should represent what the worker would have received if they had been at work, and that therefore employers should take an all-inclusive approach when calculating holiday pay.

[honeybee13]

Hello again, Loz.

 

Can you update us on what has happened since you last posted please?

 

HB

[loz]

Hi Honeybee,

Since my previous update where I was told

Call out is not a fixed rate shift premium it is a variable allowance and not contractual like shift premium.

I haven't progressed this, as I didn't know what I should do. I don't see how they can claim it's a variable allowance when I get it every day of the year just for existing.

[loz]

Very interested in the EAT ruling on holiday pay, though not so much the thing about 3 month gaps between holidays. I did however see this quote after the ruling:

They [employees] would have to try and argue that the entitlement to holiday at the right rate was part of the contract and bring a breach of contract claim. Those claims can go back 6 years

I have emailed HR today asking for the company's view on the ruling, in relation to my own situation of being on 24/7 standby for over 7 years...

 

[edit]

I just recalled that their own handbook says

When on annual holiday you will be paid at your basic rate of pay plus your fixed rate shift premiums, if applicable

So maybe the breach of contract angle would work..?

[loz]

Just sent this email:

Dear *employer*,

As we have had no clarity on this I thought I would state my case. My pay slip today has had £144 gross taken from my overtime claim, representing 9 days’ on call payments for December. This would appear contrary to the EAT ruling that holiday pay should be in line with normal remuneration.

Historically I have now missed out on 241 days worth of such payments, dating back to June 2007, and I am obviously keen that I should recover as much of the £3856 deducted as possible.