Payment for unused annual leave

greensea27

Hi All

My wife recently took early retirement from a school admin position in a large local academy. She worked full-time (not part-time or term time only/pro-rata) and had many years in, working initially for the local council in various schools and then transferring to the academy a few years ago under TUPE.

She could have left in April this year, but stayed on until June, allowing the academy time to recruit and train up (with her assistance) her successor. As a result, when she finally left, she had 18 days outstanding annual leave which she had been unable to take.

It was agreed she would receive payment for these days, but the academy and council HR teams are insisting that each day is only paid at 1/365th of her annual salary, whereas we think the correct calculation should be her annual salary divided by the number of working days (i.e. excluding weekends) in a year - 5 days a week over 52 weeks = 260 days. After all, when taking annual leave you don’t include the weekends, just the working days. We therefore think each day should be paid at 1/260th (rather than 365th) which provides a rather more substantial sum.

Grateful for any thoughts, and in particular referral to any legislation or guidance, etc, which we can point out to the unhelpful HR folk.

glentoran99

greensea27 wrote: »

Hi All

My wife recently took early retirement from a school admin position in a large local academy. She worked full-time (not part-time or term time only/pro-rata) and had many years in, working initially for the local council in various schools and then transferring to the academy a few years ago under TUPE.

She could have left in April this year, but stayed on until June, allowing the academy time to recruit and train up (with her assistance) her successor. As a result, when she finally left, she had 18 days outstanding annual leave which she had been unable to take.

It was agreed she would receive payment for these days, but the academy and council HR teams are insisting that each day is only paid at 1/365th of her annual salary, whereas we think the correct calculation should be her annual salary divided by the number of working days (i.e. excluding weekends) in a year - 5 days a week over 52 weeks = 260 days. After all, when taking annual leave you don’t include the weekends, just the working days. We therefore think each day should be paid at 1/260th (rather than 365th) which provides a rather more substantial sum.

Grateful for any thoughts, and in particular referral to any legislation or guidance, etc, which we can point out to the unhelpful HR folk.

surely in a school she wouldn't be working 52 weeks though? 8 weeks in summer etc?

jobbingmusician

What is her annual holiday allowance? What I am getting at is - when she takes a week's leave, does she use 5 days' holiday allowance?

The legal minimum (of course, schools exceed this) is 5.6 weeks for full time workers. This is calculated as 28 days, because when a normal FT worker takes holiday, they use 5 days.

What does your wife's contract say about annual leave? Maybe we can use their own wording to make them see sense.....

sangie595

It is actually a legitimate way to calculate wages, and this is how some councils do it. There actually is no "correct way" to do it. Some councils calculate on working days, some on calendar days. The law doesn't tell them they must do it one way and not the other. If this is how the operate, then you won't get them to change it for her - it is how everyone is paid, not just her. In fact, traditionally, this is exactly how councils always used to calculate wages - on 365 days. It changed with some far more recently, and the reason for that change was to penalise striking employees by "charging" them a larger amount of money for a strike day. They didn't even try to be evasive about the reason!

prowla

Well, I believe that only working days should be included in the calculation and not weekends & bank holidays.

I suppose one way of looking at it would be how many days you get per year, divided by 12, giving how many days/month, or conversely divided by 52 to give days per week.

The number of working hours per week, etc. should be a way of establishing what is/isn't a working day, along with the fact that you don't have to take leave for weekend days.

From my perspective, it looks like the employer is pulling a fast one.

IANAL and can't advise on the legalities.

sangie595

prowla wrote: »

Well, I believe that only working days should be included in the calculation and not weekends & bank holidays.

I suppose one way of looking at it would be how many days you get per year, divided by 12, giving how many days/month, or conversely divided by 52 to give days per week.

The number of working hours per week, etc. should be a way of establishing what is/isn't a working day, along with the fact that you don't have to take leave for weekend days.

From my perspective, it looks like the employer is pulling a fast one.

IANAL and can't advise on the legalities.

But what you believe isn't relevant. That is just an opinion. And there is no law on this matter. So the only reference point is policy - how does the employer calculate wages? To determine that they must ask the employer - opinions here are irrelevant. So they need to ask. It's not that difficult. If they are pulling a fast one it will show up by comparing existing wages information with their explanation. But we don't dictate their policy. And this is the way some local authorities still calculate wages. If that is the case, it works out evenly over employment - as does the alternative.

getmore4less

The law for holiday pay.

A weeks holiday gets a weeks pay.


Any conversation to days should retain that ratio.

greensea27

glentoran99 wrote: »

surely in a school she wouldn't be working 52 weeks though? 8 weeks in summer etc?

It's only the kids, and some teachers, who enjoy long summer holidays. For many other (especially admin) staff, they work full-time through out the year.

greensea27

sangie595 wrote: »

But what you believe isn't relevant. That is just an opinion. And there is no law on this matter. So the only reference point is policy - how does the employer calculate wages? To determine that they must ask the employer - opinions here are irrelevant. So they need to ask. It's not that difficult. If they are pulling a fast one it will show up by comparing existing wages information with their explanation. But we don't dictate their policy. And this is the way some local authorities still calculate wages. If that is the case, it works out evenly over employment - as does the alternative.

The Academy my wife works for raised this with HR at the local council who stated each day's annual leave is worth 1/365th of her annual salary. We have asked for sight of where this instruction comes from (Council handbook, HR guidance manual, etc) but to date nothing has been forthcoming. I was rather hoping that one of the Union websites, for example, might have a definitive definition, but from your, and other, responses (for which we are most grateful) it would appear it's up to employers how they interpret (and pay!) this.

Savvy_Sue

If you wife is in a union, she should ask them for their help with this.

getmore4less

greensea27 wrote: »

The Academy my wife works for raised this with HR at the local council who stated each day's annual leave is worth 1/365th of her annual salary. We have asked for sight of where this instruction comes from (Council handbook, HR guidance manual, etc) but to date nothing has been forthcoming. I was rather hoping that one of the Union websites, for example, might have a definitive definition, but from your, and other, responses (for which we are most grateful) it would appear it's up to employers how they interpret (and pay!) this.

There is no way that each days holiday is worth 1/165 of annual salary could comply with working time regulations and the employment act which clearly states a weeks holiday is worth a weeks pay.

In the extreme for a 5 day a week worker with statutory holidays (5.6 weeks/28 days).

if you worked 46.4 weeks and were to get the the last 5.6 weeks paid as holiday that would 10.77% of the annual salary

If paid out at 28/365 that would be 7.67% of annual salary.


Note 1: The way the legislation is written the calculation for accrued unused results in a different type of underpayment.

Note 2: For term time working where the pay is spread over 52 weeks the calculations may need adjusting if you leave part way through the holiday year as the true weeks pay is not the actual weeks pay.