Employment Contract -sick pay and car allowance

APer

Hello

Hoping someone/HR person can answer this question. It is a little similar to this thread about car allowance (sorry can't post link, it was thread 3058542)

But...

My employment contract states that I will be paid x amount of salary and x amount of car allowance every month. ie this is my "normal" salary, plus any commission made on sales. The contract also says that if I become long term ill, then my employer will pay me 75% of my salary until I either get well or reach retirement age. (PHI)

I am now on long term sick leave and they are paying me 75% of my salary without the car allowance component. They said that the car allowance is an extra and not part of my regular salary so it doesn't count. I only have their word for it, and they may well be right but I can't find any information on it anywhere.

What I want to find out is whether that is true or whether they should be paying me 75% of the car allowance part of my salary as well?

Thanks for any help

WestonDave

On the face of it, what the document says is that if you are ill you will get 75% of salary. Elsewhere it refers to your salary being £x and the car allowance being £y. So I think you'd find it hard to argue that in the sentance which specifically states when sick you get "75% of salary" this means either "75% of salary plus car allowance" or that "salary" which is defined elsewhere as £x actually means £x+£y. Contracts are usually carefully written and if what was meant was you'd get 75% of the full amount that would have been written. Fair enough it doesn't specifically exclude car allowance from the amount paid when sick, but I think the wording is clear enough that its just 75% of the £x per year salary.

marybelle01

I agree. Car allowance isn't salary. It's car allowance. It is paid to cover a contribution towards your vehicle costs because you are using it for work. If you are not at work then you aren't using it for work, so the car allowance isn't payable.

Southend1

marybelle01 wrote: »

I agree. Car allowance isn't salary. It's car allowance. It is paid to cover a contribution towards your vehicle costs because you are using it for work. If you are not at work then you aren't using it for work, so the car allowance isn't payable.

Although you could make a case that car allowance should continue to be paid at least in the short term until you can make arrangements to sell the car or end the lease for example. Strictly speaking I think marybelle is right but there's no harm in seeking a compromise or negotiated solution

marybelle01

Southend1 wrote: »

Although you could make a case that car allowance should continue to be paid at least in the short term until you can make arrangements to sell the car or end the lease for example. Strictly speaking I think marybelle is right but there's no harm in seeking a compromise or negotiated solution

I agree - but PHI seldom kicks in for short-term illness, so it's probably past the "short-term" already. Mine kicks in after eight months sickness, and most people I know with PHI have terms of between 6 and 12 months sickness before it kicks in.


Oh - and PHI is generally outsourced (provided by an external company) who are the ones who set the terms, not the employer.

Southend1

marybelle01 wrote: »

I agree - but PHI seldom kicks in for short-term illness, so it's probably past the "short-term" already. Mine kicks in after eight months sickness, and most people I know with PHI have terms of between 6 and 12 months sickness before it kicks in.


Oh - and PHI is generally outsourced (provided by an external company) who are the ones who set the terms, not the employer.

Fair point, I'm not familiar with PHI, I assumed it was paid by the company. No harm in asking the company whether they would pay car allowance for an additional month or two to allow time for arrangements to be made in relation to the car though

marybelle01

Southend1 wrote: »

Fair point, I'm not familiar with PHI, I assumed it was paid by the company. No harm in asking the company whether they would pay car allowance for an additional month or two to allow time for arrangements to be made in relation to the car though

No problem - few people are familiar with it because it's an unusual term, especially these days. But no, PHI is a form of insurance, and is generally offered through insurance type companies - similar to "private pensions". The employer may pay or contribute towards it, but they don't actually "own it" like they would sick pay.


In fact I am wracking my brains and apart from me, I think everyone I know who has it through their employment are in the financial sector. I am sure other sectors have it, but I can't think of a single case I know of!

ohreally

APer wrote: »

My employment contract states that I will be paid x amount of salary and x amount of car allowance every month.

With policies, the devil is in the detail and if they have worded their policy poorly then I'd be inclined to discuss the matter with the employer.

Southend1

marybelle01 wrote: »

No problem - few people are familiar with it because it's an unusual term, especially these days. But no, PHI is a form of insurance, and is generally offered through insurance type companies - similar to "private pensions". The employer may pay or contribute towards it, but they don't actually "own it" like they would sick pay.


In fact I am wracking my brains and apart from me, I think everyone I know who has it through their employment are in the financial sector. I am sure other sectors have it, but I can't think of a single case I know of!

It probably makes sense for small firms because it would allow them to offer reasonable employment terms without the risk that one or two employees will cripple the company's finances by becoming long term sick.

marybelle01

Southend1 wrote: »

It probably makes sense for small firms because it would allow them to offer reasonable employment terms without the risk that one or two employees will cripple the company's finances by becoming long term sick.

Actually, in my experience, it's usually big employers. It's very expensive to purchase. Small companies usually just dismiss. And don't usually pay anything other than SSP. It's also often the case that you have to be unable to work at all, in any occupation. After all with PHI it is entirely possible that an employee could be eligible to claim it for decades.

Southend1

marybelle01 wrote: »

Actually, in my experience, it's usually big employers. It's very expensive to purchase. Small companies usually just dismiss. And don't usually pay anything other than SSP. It's also often the case that you have to be unable to work at all, in any occupation. After all with PHI it is entirely possible that an employee could be eligible to claim it for decades.

Strange because I've always had a company pension scheme that would allow for early retirement due to incapacity. I can't quite see where this PHI fits in.