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Query on Employment Contract and calculation of final Salary and Holiday Pay


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Hi there,

 

I have recently left my previous full time job and got my final pay slip.

 

I was employed full time since November 2014.

 

My contract states that my "core hours of work are 41 hours a week, Monday to Friday 9am to 5pm."

 

However, one term which I failed to read properly states:

 

"Where you have taken more or less than your accrued holiday entitlement in the final year of your employment, a proportionate adjustment will be made by way of additional or reduction from (as appropriate) your final gross pay calculated at 1/365th of Full Time Equivalent salary for each day's pay up to a maximum of 20 days.

 

I have already contacted them to dispute this and ACAS. ACAS said they could not help and told me to go to a solicitor.

 

I realise that I have signed the contract and thereby agree to the terms but wondered if there was anything I could do?

 

I am not contractually bound to work weekends and never have. Can they do this? I have never worked anywhere where they have done this.

 

I have received the following email from my previous employer's payroll department:

 

"I refer to our telephone conversation of this morning regarding the calculation of your July salary.

 

To confirm your salary was calculated as follows :-

Annual Salary £25,000.00/12 = £2,083.33 as was normally paid each month. As your last day was 1 July 2016 you were entitled to one day’s pay (£2083.33/31)=£67.20.

 

To confirm your annual leave was calculated as follows:-

Your annual leave entitlement for the period 1 February 2016 to 31 January 2017 was 27.5 days. You carried forward 10 days leave less any holiday taken. The maximum annual leave payable on leaving is twenty days .

 

The calculation was 5/12x27.5=11.50days Plus 10 days carried forward = 21.50days less any leave taken.

 

Twenty days were therefore paid.(£25,000.00/365= £68.49x20)=£1,369.86.

 

Please find attachments for terms & conditions (see highlighted paragraph) and your original contract."

 

 

 

I have attached a copy of my employment contract with relevant sections blanked out and the terms my employer has referred to with this post.

 

 

I would really appreciate any advice on this matter.

Calculation of Salary.pdf

Copy of Employment Contract.pdf

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For a full time worker you are entitled to 28 days paid holiday a year which can include bank holiday entitlements under the Working Time Regulations.

 

You need to check first if the hours in excess of 20 days contractual holidays are being paid as bank holiday entitlement

 

Your holiday entitlement will be from February 1st until the date of termination of employment. That includes any notice period

 

Looks to me you are being paid 20 days annual leave plus 8 bank holidays to bring you up to the statutory 28 day a year entitlement

Edited by obiter dictum
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For a full time worker you are entitled to 28 days paid holiday a year which can include bank holiday entitlements under the Working Time Regulations.

 

You need to check first if the hours in excess of 20 days contractual holidays are being paid as bank holiday entitlement

 

Your holiday entitlement will be from February 1st until the date of termination of employment. That includes any notice period

 

Looks to me you are being paid 20 days annual leave plus 8 bank holidays to bring you up to the statutory 28 day a year entitlement

 

 

Hi,

 

Thank you for your reply. I have checked and the 20 days are part of my 22 days per annum entitlement. The 20 days consist of carried forward balance and this years accrued days.

 

Public holidays are treated separately as an additional entitlement of 10.5 days under their contract called public and priveledge days.

 

I also had a thought...my holiday days are can only be taken within my contractual days - i.e. Monday to Friday of any year so, over a year, I only have 261 days (365 days excluding weekends of 104 days) in which to take my holiday days. Therefore, how can they then include all days of the year in the salary and holiday pay calculations?

 

In effective it would seem that I am financially at a loss as I left with accrued holiday. Also, it would imply that if I had finished on a Monday rather than a Friday, they pay you an additional two days (Saturday and Sunday) ?

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You will find that most employers now work out holiday entitlement on actual hours worked, not days

 

You are only contracted to work monday to friday so the weekend is classed as non working days.

 

I am having trouble finding any issue as you are being paid your normal holiday entitlement and made up to the statutory allowance with paid bank holidays.

 

Or am i missing something??

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Your holiday should be calculated on a 1/260 calculation, not a 1/365.

 

Based on your gross annual salary, you should be paid £96.15 gross per day (which could well equate to £67ish net, I don't know).

 

So you should be paid £1,923 gross for 20 days holiday.

 

So they may be giving you the correct holiday, but your pay is incorrect.

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You will find that most employers now work out holiday entitlement on actual hours worked, not days

 

You are only contracted to work monday to friday so the weekend is classed as non working days.

 

I am having trouble finding any issue as you are being paid your normal holiday entitlement and made up to the statutory allowance with paid bank holidays.

 

Or am i missing something??

 

Hi ,

 

thank you for your reply.

 

I agree, my contracted days are only Monday to Friday, therefore, I could only be taking any holiday Monday to Friday, i.e. only within 260 days for the year.

 

However, in my contract it says that they calculate any outstanding holiday entitlement at 1/365th of Full Time Equivalent salary for each day's pay up to a maximum of 20 days. Therefore, they are including weekends?

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Your holiday should be calculated on a 1/260 calculation, not a 1/365.

 

Based on your gross annual salary, you should be paid £96.15 gross per day (which could well equate to £67ish net, I don't know).

 

So you should be paid £1,923 gross for 20 days holiday.

 

So they may be giving you the correct holiday, but your pay is incorrect.

 

I agree and came to the same calculation as you did.

 

However, they are using the terms in the contract to pay me 1/365th. So, twenty days holiday was paid as follows: (£25,000.00/365= £68.49 x 20) = £1,369.86.

 

They say it was in the contract and I signed it so tough. :(

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It's wrong, but I think they can legally get round it.

 

You are entitled to receive a weeks pay for a weeks leave and your contract cannot override that; it's a statutory right that you can't contract out of. However, you're also not entitled to carry forward statutory leave under the working time regulations, so any leave that you carried forward will be contractual leave, not statutory leave.

 

As its contractual, they can pay what they want (even nothing at all) as long as youre getting paid properly for at least your statutory minimum entitlement.

 

So to work out the correct pay, you'd have to work out how much of your statutory 28 days leave you accrued during the current leave year, paid at £96.15 per day. The remaining contractual leave allowance would then be paid at £68.49 per day.

 

I'm not 100% sure if this is correct as I've never come across this in practice, it's more just my musings!

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ultimately the law of the land overrides the contract so if the calculations on your leaving are to your disadvantage you can invoke the law. However, if you took all of your a/l and then resigned owing them money it would be interesting to see if they are so keen on the calculation method after all. I would be doing my own sums and submitting them a bill with a noter saying the WTD overrides the contract and you expect the full amount to be paid. Becky's calculations would be based on you not taking your leave or carrying it forward by your own choice. If you were denied the opportunity to take the holiday when you requested it then the full daily/hourly rate would apply to all of it.

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Hi ericsbrother,

 

Thank you for your reply. They are adamant that I signed the contract and it's correct. Shall I go to my local Law Centre and see if they can help me draft a letter as I am unsure what to write? I accrued 20 days holidays and they didn't want me to take any during my notice period.

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you say they didnt want you to take them, that is not the same as denying you the leave. To invoke the WTR's you have to apply for teh leave in writing a set period ahead of the time and they must refuse it. You should speak to a law centre. You will need something that confirms your story though, like a copy of your A/L request or an email saying you want to take the time off as leave to clear the entitlement during you notice period. Without that it is harder but the law says that the language should be used in its commonest form so a week is a week, not 5/365ths of a year

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you say they didnt want you to take them, that is not the same as denying you the leave. To invoke the WTR's you have to apply for teh leave in writing a set period ahead of the time and they must refuse it. You should speak to a law centre. You will need something that confirms your story though, like a copy of your A/L request or an email saying you want to take the time off as leave to clear the entitlement during you notice period. Without that it is harder but the law says that the language should be used in its commonest form so a week is a week, not 5/365ths of a year

 

 

Thank you ericsbrother,

 

Yes, my boss verbally told me she didn't want me to take any leave in my notice period as she wanted me to do a hand over to another staff member. I will contact my local law centre and explain everything. On the plus side, I took a copy of my leave card before I left as I had to hand it in to HR when I left.

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told you no is not the same as denying in writing, I'm afraid. Still, the interpretation of the WTR's your comany is making flies in the face of what is intended somay not be a legal contractual clause. I bet your ex-employer wont want to test that in a tribunal and will pay up if it looks like you are properly advised and prepared to go for it.

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told you no is not the same as denying in writing, I'm afraid. Still, the interpretation of the WTR's your comany is making flies in the face of what is intended somay not be a legal contractual clause. I bet your ex-employer wont want to test that in a tribunal and will pay up if it looks like you are properly advised and prepared to go for it.

 

Thank you ericsbrother. I understadn, worth trying though.... Will let you know what happens

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