Holiday pay query on contracted hours

[babyblue72]

Hi

 

I am looking for some guidance if possible please.

 

I currently work for a company on a 15hrs contract but have 29 permanent hours that I work weekly and have done for 2 years. Whenever it comes to taking holidays I feel that perhaps I am being short-changed because they will only pay me for 15hrs per week. Is this really all I am entitled to?

 

Thank you in advance for any information or help you can offer

[becky2585]

As the law currently stands, yes, they're acting lawfully by only paying you for holiday accrued based on 15 hours. However, there has been a non binding first instance decision which states this is incorrect, so I do suspect the law will change over the next few years.

 

You could always ask for a 29 hour contract and see what they say!

[SabreSheep]

Could you use custom and practice tp argue that over 2 years those hours have now become implied into your contract of employment and therefore subject to holiday pay accrual?

[becky2585]

I don't think custom and practice is relevant for holiday pay purposes (at the moment at least). There is no dispute as to the amount of hours worked - the dispute is as to whether they are contracted hours (which they are not) or overtime hours (which they are as they are in addition to the contractual entitlement). As the law stands, you can only be paid for contracted hours.

 

To go into more specific detail, the Employment Rights Act stipulates that an employee who has "normal working hours" will have their week's pay calculated in accordance with those hours. If you work hours in addition to those stipulated in the contract of employment, they are treated as overtime pay, which is not used for calculation of statutory leave. If an employee is entitled to overtime pay when working for more than a fixed number of hours in a week, they are treated as having normal working hours equivalent to that number - meaning that only GUARANTEED overtime is included when calculating holiday pay. Clearly such a guarantee would be very difficult to demonstrate when the contractual right is far less hours and the employer has the right to change their hours at any time.

 

For what it's worth I think that the law as it stands is totally wrong and undoubtedly should be challenged (and inevitably will be, I am sure).

[SabreSheep]

What I was getting at was that OP has worked 29 permanent hours (14 more than his contract) per week every week for 2 years and therefore could the extra 14 have become contractual as an implied term. It is said permanent not overtime.

 

The problem of course is where do you argue it would have become contractual hours.

 

OP, what would happen to you if you did not work any of those 14 extra hours? Would you be treated as absence? If you would go through the absence procedure then I would argue the company is treating you as if they are contracted hours and thus your contracted hours should be updated to reflect that. Once that is done all holiday and sickness should be accrued correctly.

 

That is my take on it. I am no means a legal professional. We did use this argument at one of my workplaces

[becky2585]

I understand the argument that you are trying to run and I suppose it's theoretically possible to try and mount a challenge on that basis, but I am not aware of anything specific challenging holiday pay based on custom and practice. I think the reason such an argument would fail is the wording of the Employment Rights Act. S234 specifically states:

 

234 Normal working hours.

 

(1)Where an employee is entitled to overtime pay when employed for more than a fixed number of hours in a week or other period, there are for the purposes of this Act normal working hours in his case.

(2)Subject to subsection (3), the normal working hours in such a case are the fixed number of hours.

 

(3)Where in such a case—

 

(a)the contract of employment fixes the number, or minimum number, of hours of employment in a week or other period (whether or not it also provides for the reduction of that number or minimum in certain circumstances), and

(b)that number or minimum number of hours exceeds the number of hours without overtime,

the normal working hours are that number or minimum number of hours (and not the number of hours without overtime).

 

Because it's worded in such a way as to refer specifically to FIXED hours stipulated under a contract of employment, I don't see how C&P can override that. It would be different of course if the written contract of employment was worded in such a way as to effectively "force" overtime - ie if the overtime become a contractual requirement, or if it was clearly necessary to do the overtime in order to fulfil the job role.

 

The first instance decision I mentioned above is Neal v Freightliner which found that the employee WAS entitled to be paid for voluntary overtime - but this isn't a decision binding on the courts as it was only an ET case which has no binding authority. Therefore, the law as it currently stands means that overtime does NOT need to be taken into account when calculating holiday pay, but as previously mentioned, it's probably likely to change!

[Christine934]

Is your employer's normal working week 37 hours? Then it sounds like any hours worked over 37 hours would be overtime, so you ought to be paid holiday pro rata on hours worked up to 37 as a part time employee. (I'm not a legal person either though).

 

Also try the Citizen's Advice Bureau for advice:

 

You have the right to take 5.6 weeks' paid holiday a year. To find out how this applies to you, see under heading How much paid holiday can you take.

Before 1 April 2009, your right to paid holiday from work was 4.8 weeks. Your leave year may have started before 1 April 2009 and carries on after 1 April 2009. If so, your annual leave will be worked out on a pro-rata basis – 4.8 weeks pro rata for the period before 1 April 2009 and 5.6 weeks pro rata for the period from 1 April 2009.

Your contract of employment may give you the right to take more than the statutory amount of paid holiday. However, it cannot give you less. If your contract gives you the right to take more than the statutory amount of paid holiday, this is called contractual holiday. The law doesn't say how much contractual holiday you should get, or whether or not it should be paid.

 

http://www.adviceguide.org.uk/england/work_e/work_time_off_work_e/holidays_and_holiday_pay.htm

[Sidewinder]

Any Custom & Practice argument could only be pursued if there was no doubt over the mutuality of obligation issue.

 

How are the hours allocated? Requested or rota'd?

Does the employee have a say in whether the hours are worked or not? Would there be a likely detriment in future treatment or even a disciplinary issue if the extra hours were refused?

How are payments shown for the extra hours on payslips? As 'overtime' or under normal working hours?

 

It isn't as straightforward as simply claiming that one has a right to expect 'normal' working hours to evolve into an implied contractual right solely due to the fact that they are worked over an extended period.

 

I am with Becky - the current legislation will HAVE to change at some point - flexi contracts with regular overtime to fulfil the needs of employers without the additional costs of holiday or other benefits are a major scandal in many industries and it needs somebody with the balls to either set a binding precedent or to change the current legislation. Sadly our glorious leaders are currently all too keen to minimise the costs and red tape to businesses at the expense of giving hardworking employees what they deserve!

[babyblue72]

Taken me a while to get back to this but here I am. Thank you all for your contributions. The extra hours were made available on a master rota and I requested them - they then became my permanent shifts and have been rostered to me on a permanent basis since. If I was to not work them it would be recorded on my file and I would be disciplined.

[Sidewinder]

Then you should write to your employer stating that you believe that you have been underpaid holiday pay for the period during which you have worked 29 hours per week and what they propose to do about it - especially in the light of the recent Bear Scotland Limited v Fulton case. Although this case may be subject to appeal, the EAT held that holiday pay must be based on an employee's normal working hours including any non-compulsory overtime, for at least the four weeks holiday each year that is governed by the WTD.

[billathome65]

I'd tend to agree with Becky2585 about the holidays. However, what I would also say is if you regularly work a 25 hour shift go to your manager and ask that your contracted hours be changed to 25 hours as you regularly work that and have done every week for X amount of time. It's worth a shot but don't hold your breath.

 

Good luck

[becky2585]

I'd tend to agree with Becky2585 about the holidays. However, what I would also say is if you regularly work a 25 hour shift go to your manager and ask that your contracted hours be changed to 25 hours as you regularly work that and have done every week for X amount of time. It's worth a shot but don't hold your breath.

 

Good luck

 

That post was a while ago now, but as I mentioned back in June, the law was likely to change and has now in fact shifted in light of the Bear Scotland case.

[billathome65]

Sorry, didn't realize it was an old post being new to the forum i'm just getting my bearings.

 

Hi by the way Is that Bear Scotland V D Fulton If so I have it in my to read list:)

 

I take it from the small bit I have read that the ruling was for the overtime to be paid that account for OT? I thought or understood this ruling was being contested?

 

I may have that wrong

 

Edit Drrrrrrrrrrrrrr just realized it was that ruling on the news last month. It wasn't specifically just Bear Scotland It was British Gas amongst others.

 

Thanks Becky 2585 it just stirred the gray matter

 

Regards Bill

Edited December 11, 2014 by billathome65