Final salary issue. Rate of pay.

[TeaandCake]

Hi, asking on behalf of my colleague.

We work in a small specialist shop and we are the only employees. The business is owned by a Mother and Daughter. My colleague has been employed here as shop manager since July 2013.

She was called into a meeting in July this year and informed that they could no longer afford to pay her a manager's wage so cut her hours to part-time and her hourly rate to minimum wage. ACAS told her our employers could do this as she had been employed by them for less than two years.

The changes are due to start in September. In the meantime my colleague has found another full-time job and handed in her notice. She is due to leave mid-September.

My colleague has taken 10 days holiday this year but at the time of her leaving she will have only accrued 6.5 days holiday, so our employers will deduct 3.5 days pay.

I thought this would come from her final leaving salary (the lower rate) but they are going to take it from her August pay which is at the manager's rate.
Surely this is incorrect?

I would be really grateful if anyone could offer any advice on this.

TIA

Sorry this was so long winded, just wanted to give the full picture.

[Onesleeptillwembley]

She was obviously paid the holiday at the managers rate, so it seems fair for her to repay it at that rate.
This is just my view though, I don't know legally if it's right.

[sleepyhead]

I agree with onesleep. It's an unusual situation, but she had her extra annual leave paid at the higher rate so that's the portion of her wages which have been overpaid.

[ABlandAndDeadlyCourtesy]

Simplistically, suppose you have a leave year that runs Jan-Dec and 24 days a year leave, so you accrue two days per month.

Then by mid sept she would have accrued 16 days at the high rate and one day at the low (assuming no holiday balance at the beginning of the year).

So the "average" day rate for the reclaimed days would be very similar to the high day rate, in my example.

[ABlandAndDeadlyCourtesy]

...I do think using an average would be fairer but the actual difference may be negligible.

[TeaandCake]

Ah, I see. Yes, that does make sense. Thanks.

The thing that rankles though is that she didn't really want to take her holiday in June (she would have preferred Sept/Oct but they gave her no other choice at the time). Anyway, that's a side issue I guess.