Term-time working - leaving job, pay/unlawful deduction from wages

[Jobless123]

I am leaving a job on 30 April 2015, having given my 4 weeks notice. I started this job originally casually on 9 July 2012, and then permanent on 1 September 2012.

The September 2012 contract reads as follows:

1. Remuneration and Hours of Work

(i) Your permanent hours of work are 37.5 per week. These hours of work and/or actual working times may be varied at the entire discretion of your Line Manager to reflect the requirements of the team.

(ii) The working year on which payment is based comprises 210 days during the school terms, and in addition 21.8 paid holiday days (see Clause 4). This totals 231.8 days or 46.36 weeks p.a. There is no retainer payment associated with this post. In view of paid holidays, employees are expected to return to work for at least one month in the Autumn Term.

(iii) Your hourly rate of pay is £8.63 per hour.

(iv) Your pay will be annualised inasmuch as you will receive the same amount of pay per month throughout the year. Based on an annualised rate of £15,000 and your nromal working hours, you will be paid £1,250 per month.

(v) Payment will be monthly in arrears by direct credit transfer to your bank account. Should any overpayment be made to you, the necessary deductions will be made from your wages at a rate agreed with your Line Manager.

1. Holidays

The annual leave year will commence on 1 September and you will be entitled to 21.8 days paid holiday per year (pro rata for part time contracts which can only be taken during school holidays. Holiday pay will be calculated on the permanent hours worked (see Clause 3i). There is no payment for Bank Holidays that fall outside of the school term.

The contract was made with Company A, and in August 2013, my employment were transferred under TUPE to Company B (they are in agreement on this matter).

I have sent the company an email, saying that:

(a) the 21.8 paid holiday days are less than the statutory (WT Amendment Regulations 2007) minimum of 5.6 weeks. I have calculated this as:
Normal working year is 52 weeks, comprised of 232 working days, 28 paid holidays (under WT(A)R).
My working year is 210 working days, so my holiday days are 210/232 * 28 = 25.34 days. So I have claimed for 3.54 days holiday pay for each of the years ending 31 August 2013 and 31 August 2014

Their reply on this point is to argue that I am on a 42 week, whereas a normal working year is 52 weeks, and my holiday entitlement is given by

20 statutory days / 52 weeks = 0.3846 days per week, and they just throw away the 0.0046, giving 0.38, times 42 weeks = 15.96 days, plus 5.84 days for bank holidays (they haven't explained this number - I couldn't duplicate it = 21.8 days)

Anyway, anything wrong with my calculations, and with my claim for the past two years holiday pay?

(b)
My daily rate of pay is £64.73 (7.5 hours @ £8.63/hour). Inclusive of holiday pay, this is 261/233 (261 weekdays this year, 233 normal working days) * £64.73 = £72.51

Between September 1 2014 and April 30 2015, I will have worked 155 days (actual days worked - so not including times I was on holiday, .

So the total pay due for the year September 1 - April 30 = 155 * £72.51 = £11,239.05

However the pay I will have received is only £10,000 (8 months at £1,250)

So I have claimed £1,239.05 for overtime/holiday pay.

Their reply is as follows:

"Each month you receive 1/12th of your equated pay, which includes all holidays & BH allowances.
As you requested holiday for 6 days in December – January, which has not been able to be paid back I will be making a deduction of 6 days (£427.14 ) in you April final pay packet."

This point is true in that I did take holiday in December during term time, by mutual agreement. However, there is no provision in the contract for this to be clawed back, so I am pretty sure this is Unauthorised Deduction From Wages?

Secondly, apart from that, they are basically saying that because I get equated monthly pay, I am not entitled to be paid for the days I actually worked, i.e. based on the daily and hourly rate. Is there any basis for that?

So I sent this email:

Thank you for your email.

To address the last of your points first, please note that under the Employment Rights Act 1996, your proposed deduction of £427.14 is illegal, as it constitutes Unlawful Deduction from Wages - there is no provision in law to reclaim overtaken (supposedly - I dispute this) holiday.

Secondly, your calculation of holiday hours is incorrect. Your point appears to be that my contract is for 42 weeks, whereas a normal working year is 52 weeks. However, this overlooks the fact that my 42 weeks is EXCLUDING paid holiday, whereas the normal working year of 52 weeks includes paid holiday. Therefore any calculation based on working 52 weeks is wrong.

Holiday entitlement is explained here: www.gov.uk/holiday-entitlement-rights/entitlement
And the calculator linked here: www.gov.uk/calculate-your-holiday-entitlement

Using the calculator, and my annualised hours of 1575 hours (210 days 7.5 hours), the government calculator gives a holiday entitlement of 190 hours, 5 minutes. Therefore the total annual pay, inclusive of holiday, is in fact 1765.083 hours. I.e. 1765.083 £8.63 = £15,232.67. However, you have paid me only £15,003.26, based on the incorrect holiday entitlement. The shortfall is therefore £229.41 for each of the previous two years (£458.82 in total).

Thirdly, with regard to the current year, while I understand how the equated pay works, if it is company policy is not to pay term-time workers for the actual number of days worked within the year on termination of employment, then this is very clearly less favourable treatment of part-time workers within the meaning of The Part Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, and is therefore illegal.

To illustrate this very simply, consider my salary and that of a full-time worker on the same hourly rate, £8.63.

These are:

My salary: £15,232.67 (inclusive of statutory holiday entitlement), which is an equated monthly salary of £1269.39
Full-time worker, on the same pay: £8.63 7.5 hrs 5 days * 52 weeks = £16,828.50, which is a monthly salary of £1,402.38

Had we both ended our employment on 30 September 2014 (the same principle also applies for my leaving date, this is just the simplest example), we both would have done exactly the same amount of work, 22 days, but I, as the term-time worker, would have received almost £150 less for doing it than the full-time worker.

This pay arrangement on the termination of employment therefore discriminates against term-time workers. In my case, unless I ended my employment on 31 August exactly (since the month of August carries the bulk of the annual school holiday), I would inevitably be paid less than the equivalent full-time worker in terms of pay per day worked.

It is necessary to calculate the actual days worked to avoid this. Please correct your procedures accordingly.

I wonder how many other people they are underpaying in the same manner.

Sorry you have lost me on your calculations!! However, 2 points...you do not work 52 weeks but 42 weeks, therefore term time only, you just happened to be paid for the 42 weeks in 12 equal instalments, your holiday will be calculated on 42 not 52 which you are not working. Secondly under the ERA they can reclaim overpayments and it is not unlawful deduction of wages! Thirdly, even if there was an underpayment of holiday you can only claim for up to 2 years backdated. Finally, you sound like a nightmare employee!!

Clause 3 (v) clearly states any over payment can be reclaimed - this is what they are doing, they are allowed (assuming they have overpaid your holiday). And it does on the surface appear you were overpaid as you took 6 days holiday within term time - so you have been paid for 6 days holiday on top of your normal wages plus holiday pay.
Secondly it is normal practice when an employee leaves with in the holiday year to work out your days/hours worked so far to calculate how many day holiday (pro rata) has been accrued - and pay those days at your normal rate of pay. I cba to think about it too much/work out the sums but I don't think you can say I normally get x amount per day inc holiday pay and therefore...because the holiday you are entitled to per day is calculated assumed you were going to work the full 42 weeks...and you aren't going to.
The only thing that I will say in your favour is as I understand it the way you are paid - with holiday included every month is considered slightly dodgy - I thought it had to be clearly and separately indicated. If it is a big company I suspect they have got that covered but maybe not - maybe you could call Acas and ask for advice.

We used to employ someone who had been on this system for many years (we got them to sign something saying it was how they wanted to be paid) they left through choice at short notice because of personal problems. Different holiday year and time of the year but no matter how kindly I calculated it they still owed us holiday pay...which in the end we didn't deduct because they had been a dedicated and valuable employee and were having a difficult time (and we didn't tell them we did that either).

And sorry agree with Yummy - you do sound like nightmare employee - I think your first approach should have been to ask for clarification - hope you aren't expecting any more than an 'ok' reference...doubt you'll be getting a glowing one.

Overpayment of holidays needs to be signed off by the employee before its deducted, otherwise it's an unlawful deduction.

But they haven't deducted it yet ...and it is apparently 'under dispute'.
And in this case it is part of the final pay calculation not sure it 'counts' - otherwise most employees wouldn't sign it off - would they?
(You have had all 5.6 weeks off paid in the first 2 months of the holiday year and now you are leaving so we are going to deduct it from your final pay ... you need to sign this so we can. Employee yes of course no problem ...)

"you do not work 52 weeks but 42 weeks, therefore term time only, you just happened to be paid for the 42 weeks in 12 equal instalments, your holiday will be calculated on 42 not 52 which you are not working. "

Nobody works 52 weeks. You work 52 weeks MINUS holidays, which is 46.4 weeks.

I work 42 weeks PLUS my holidays.

So it's based on 42 not 46.4. 52 is a red herring.

Official government holiday calculator confirms my figures. www.gov.uk/calculate-your-holiday-entitlement/y (Based on annualised hours, 210 days * 7.5 hours per day)

"Secondly under the ERA they can reclaim overpayments and it is not unlawful deduction of wages! "

In order to reclaim overpayments you need first to have been overpaid.

That hasn't happened.

"Finally, you sound like a nightmare employee!!"

Uh, thanks?

"And it does on the surface appear you were overpaid as you took 6 days holiday within term time - so you have been paid for 6 days holiday on top of your normal wages plus holiday pay. "

What do you mean paid for 6 days holiday plus holiday pay? That doesn't make any sense.

The problem with any attempt to reckon the pay/holidays on this basis is that you can't assign what is work, what is holiday and what is unpaid leave.

There are 260 week days in the year, of which:

210 - paid work
25 - paid holiday
25 - unpaid leave

or 210 working, 50 not working

Currently we are 174 week days through the year starting from 1 September. I have worked 155 days, and had 19 days off.

So out of my 50 days off in a year, I've only had 19 days so far, 8 months through the year.

Perhaps I didn't make it clear enough, but although I had days off in term time, I worked:

October half term
February half term
Easter holidays (excluding the bank holidays)

Which comes to 18 days OUTSIDE the school term, which I have worked.

My point is that you don't actually need to look at term dates and such like, because they just need to count the days worked and multiply it by the daily rate of pay.

Paying the same amount every month is fine when you are in work, because most people prefer a monthly payment of £1,250 than 10 monthly payments of £1,500 and then two months of nothing, but if you don't pay for the actual days worked when you leave the job, then it's discriminatory.

Bear in mind that they (or their predecessors, to be fair) did actually deliberately set this situation up. I actually started work in July 2012, but it was on a casual contract and they only offered me a full-time job starting 1 September, which is designed so that the only way I would ever get paid in full for my work done in the year is if I resigned at the end of August.

"And sorry agree with Yummy - you do sound like nightmare employee - I think your first approach should have been to ask for clarification - hope you aren't expecting any more than an 'ok' reference...doubt you'll be getting a glowing one."

What do you mean 'clarification'? I asked them, in neutral terms, about my pay/holiday, I was given some calculations on a piece of paper, and then I sent them an email to explain that the calculations were wrong.

And I've got my reference already....

"And in this case it is part of the final pay calculation not sure it 'counts' - otherwise most employees wouldn't sign it off - would they?
(You have had all 5.6 weeks off paid in the first 2 months of the holiday year and now you are leaving so we are going to deduct it from your final pay ... you need to sign this so we can. Employee yes of course no problem ...hmm)"

You are allowed to deduct from wages "by virtue of a statutory provision or a relevant provision of the worker’s contract"

So if you are worried about that, put something in the contract when they join the company.

Jobless - speak to ACAS. As I said I think as you have described the situation the way you are paid is considered dodgy (rollover holiday or something). We now pay our part time term time workers just for the hours they work and the paid holiday (any bonuses and extras) gets paid during the summer/shorter months so they get paid a bit less those months but not much and they know they have to budget to that. Less convenient for the employee (why our previous employee wanted to continue with it and signed something to say they did) but it is absolutely transparent.

If you worked when you weren't contracted to do so - in holidays you should have been paid and holiday accrued on those days. Therefore the 6 days could have been 'in lieu' but you need to get your line manager to clarify that....otherwise you have been a) paid for the days you didn't work and were contracted to work b) your holiday entitlement has been calculated on those days as if you did work.

You didn't say you asked for clarification first! just seemed to go in with your own calculations ...now you need to use the figures you were given and use them to speak to ACAS. The government calculator is (or maybe 'was' now) absolutely useless for term time/pro rata workers.

And the holiday overpayment is covered by the Clause 3 (v) - it was the pp was saying overpayment of holiday had to be signed off...I don't think it would have to be in the case of the final pay - if it had been overpaid.

Well, ACAS have been contacted.

Good - let us know how you get on
(IME ACAS are really helpful - fantastic for advice and also will act as negotiators to keep any dispute from going to tribunal ...I think they do a fantastic job!)

Well they don't particularly advise on the case as much as general mechanics of the legal process.

Anyway I've simplified my case a bit.

Basically I've said

My wage is £8.63/hour
As a full-time salary that would be £16,893.23

Full-time worker would have worked 155.33 days in the 8 month period.
I worked 155 days

So I should get 8 months full-time wages, minus 0.33 days for the overtaken holiday.

But I actually got £1665.66 less than that. So I'm claiming for 'less favourable treatment of a part-time worker', because I actually effectively worked (very close to) full-time days (during the period), but got paid less for them.

Overpayment of holidays needs to be signed off by the employee before its deducted, otherwise it's an unlawful deduction

Rubbish. If that were true any employee who had been overpaid could keep the money simply by refusing to pay it off. The employer only needs the employee's consent if they are deducting money the employee owes the employer due to a court order or if they are deducting money the employee owes to a third party. No consent is needed for deducting an overpayment of wages.

Jobless123

I disagree with your employer's holiday calculation. I make it you should get 25.3 days paid holiday per year. However, for state schools the year consists of 195 days of which there are 190 teaching days, the other 5 days being INSET days. Assuming you are working in a state school, unless you are working during the holidays you are actually getting significantly more than the statutory minimum.

If you are working in a state school I make it that you have worked only 139 days this year (or thereabouts), not 155. Are you sure you have worked 155 days?

Yes I worked during the holidays, the contract is stupid - it says I should work 210 days 'during term time' but as you say there are only ~189 term days. The result was I was instructed to work during half-term, Easter holiday, etc. to make up to the 210 days. So yes 155 days is 100% correct.

Jobless123 - did you get your pay issue resolved?