Can anybody work this out? Ref - pay

Why is it being multiplied by 14?
Is that not the same as paying based on days work. As 10days. Is the same as 14 days(including unworked). I'm confused by that.
 
In fact, carryin on from above, it is definitely incorrect to apply the calculation as in OP.

This page is particularly relevant, and will be of use;
http://www.thompsons.law.co.uk/ltext/l0860003.htm

The Employment Tribunal Chairman concluded that the employer's calculation was correct. The EAT said that was wrong and that the Tribunal should have "grossed up" the entitlement to 10 days holiday based on two working weeks to 14 calendar days to take into account the two weekends. The contract of employment was not suspended between Friday and Monday although the obligation to work did not arise. The amounts should be grossed up to a seven day week and they referred in particular to the calculation of holiday pay in Regulation 16 in The Working Time Regulations and a week's pay under the Employment Rights Act. They also disapproved of a method of calculation which varied with the length of a particular calendar month.

The EAT decide that the correct way of calculating holiday pay due to an applicant on termination of employment where 10 days holiday was owed is to divide gross annual salary by 365 to give a day's pay and then to multiply that by 14. In this case increasing the amount of money owed to the Applicant by £200. This case is of considerable assistance to those calculating amounts due on termination and shows the financial significance of getting the calculation right.
Click to expand...
 
cheesyboy said:
What you've written contradicts what you have linked to in quite an important way. From the link;
Click to expand...

No it doesn't...

Why is it being multiplied by 14?
Is that not the same as paying based on days work. As 10days. Is the same as 14 days(including unworked). I'm confused by that.
Click to expand...

The multiplication by 14 is seven fifths of 10 :p

It's only being multiplied by 14 because in this case the holiday pay is 10 days, it wouldnt be the same for the OP, but its the same calculation

10,000 / 365 x 7/5 = 10,000 / 261
 
Last edited:
Glaucus said:
Why is it being multiplied by 14?
Is that not the same as paying based on days work. As 10days. Is the same as 14 days(including unworked). I'm confused by that.
Click to expand...

It's a long-winded way of getting annual salary divided by working days
(instead of just dividing by 261, you divide by 365 then adjust for weekends)
 
lsg1r said:
you could argue both ways, but it really depends on your contract because you're on a salary rather than hourly rate. With a salary you're getting paid to cover x hours over y days, not so much an hour.

How I understand it is:
If your contract states you only work Mon-Fri then you are right in that your salary is for 5 out of 7 days a week and the 39k is for the 261 days

However if you have a salary where it doesn't state mon-friday only your contract is likely x hours spread over 7 days a week, it's just how you've been scheduled into work your hours Mon-Fri, this doesn't mean you are only working 5 days a week.

This would be HR's method, and as you've found out, it works out in their favour financially.

A perfect example of how a 'salary' can be 'funky' when it comes to holiday pay...
My mum works in a school, she has an hourly rate for her work but the actual total yearly pay is divided into monthly payments because they don't get paid over the school holidays.
Click to expand...

So going back to this - my contract states that I work 37.5 hours a week and that I work shifts. Slight confusion on my behalf here because I was promoted 12 months ago from working a pervious 4 years within the same company. I have always worked 8-4 mon-fri BUT my contract does now state shifts at 37.5hrs a week.
My annual holidays are expressed in hours but I have only ever taken them as expressed in days, therefore I do not know how many hours they class as a 'day' I'm assuming 7.5hrs.
Now I had an addition in my contract that details payment when termination of employment has occurred and it says;
The payment in lieu will be calculated at your daily rate of pay.

Nowhere in the contract state what that is or how its worked out however. Need to think of an action plan to hit them with tomorrow.

I guess what they have worked it on is my salary divided by 365 because I could fulfil those hours on everyday of the week. (I have never worked a weekend since my employment with them though) This could also be expressed as my salary divided by 52 weeks and that divided by the hours I'm meant to work that week which gives me the same lower day rate...


Argh nightmare!
 
Last edited:
If leave is calculated in hours then I assume, which ever way they spin it, that they owe you 75 hours pay. If you want to see how payroll work out holiday pay find the most recent pay slip which contains 1 weeks leave.
 
Taylor v East Midlands [2000] IRLR 760 has been superseded by Leisure Leagues UK Ltd v Maconnaiche [2002] IRLR 600.

The Eat held that the correct method of calculating holiday pay for a worker with regular hours and an annual salary is to divide the worker's annual salary by the number of working (not calendar) days in a year, multiplied by the number of days' leave the worker has outstanding.
 
mattyy said:
So going back to this - my contract states that I work 37.5 hours a week and that I work shifts. Slight confusion on my behalf here because I was promoted 12 months ago from working a pervious 4 years within the same company. I have always worked 8-4 mon-fri BUT my contract does now state shifts at 37.5hrs a week.
My annual holidays are expressed in hours but I have only ever taken them as expressed in days, therefore I do not know how many hours they class as a 'day' I'm assuming 7.5hrs.
Now I had an addition in my contract that details payment when termination of employment has occurred and it says;
Click to expand...
Note I'm no legal expert, this is just my understanding etc
Doesn't that make it easier for you....
You work 37.5 hours per week, you earn £39k and your holidays are calculated in hours....

39k/52 = 750 = weekly pay
750/37.5 = 20 = hourly pay

Get them to express your holidays in hours as per you contract and then multiply your allowance by the 20 to get your actual amount 'owed'

Having said that....
Now I had an addition in my contract that details payment when termination of employment has occurred and it says;
The payment in lieu will be calculated at your daily rate of pay.
Click to expand...
basically gives them the right to screw you over without any consequences...side note argument - you could argue your employment hasn't been terminated, you're leaving, slight difference in my opinion because termination means fired in my view.

Main argument then would be based on the definition of 'daily rate'

My understanding of a work day would be a 'normal' 9-5 which allowing 30mins for lunch = 7.5 hours a day. So by using the above calculations
7.5 x 20 = 150 per day
150 x10 = 1500 for 10 days owed holiday minus any taxes/deductions you'd normally pay etc

Like I said I'm guessing they're taking the simple approach of 39k/365 for a day rate, which would be 5.35 hours per day, but as we all know that isn't how it works for most of us but I'm sure the business realised they could save money this way.

using that basis it would work out at the £1068 for 10 days...
 
lsg1r said:
Like I said I'm guessing they're taking the simple approach of 39k/365 for a day rate, which would be 5.35 hours per day, but as we all know that isn't how it works for most of us but I'm sure the business realised they could save money this way.

using that basis it would work out at the £1068 for 10 days...
Click to expand...

They are, deliberately I imagine, mixing both methods (salary/365 and salary/261) and using salary/365 to get a weeks pay based on a 7 day week. Then making holiday pay salary/365*5 per week.
If should either be, salary/365*7 or salary/261*5

If you book a weeks leave and your remaining entitlement reduces by the equivalent of 7 days then they are correct. If not they can whistle.
 
malfunkshun said:
They are, deliberately I imagine, mixing both methods (salary/365 and salary/261) and using salary/365 to get a weeks pay based on a 7 day week. Then making holiday pay salary/365*5 per week.
If should either be, salary/365*7 or salary/261*5

If you book a weeks leave and your remaining entitlement reduces by the equivalent of 7 days then they are correct. If not they can whistle.
Click to expand...

Clearly deliberately, if I wanted two weeks off work I would book ten days holiday (for working 5 days a week). Now that I'm leaving and want ten days paid I am getting paid less because it's based on me working 7 days a week?!
 
I've always worked out annual to leave to be earnt like this....

If you work 5 days a week (Mon-Friday) and have the standard 20 days + 8 bank holidays a year you accrue 1.66666666 days annual leave per full month you worked from your companies year start (can be 1st Jan or sometimes can be 1st April I find), so you earn 1.666666 days per month worked. Every company I have worked for only gives you the monthly accurement for the full month you have been in employment.

To work out the monies owed to you; if you earn £20K per year salaried you get £384.61 per week (52 weeks) so your daily rate based on 5 days = £76.92. So if you are owed 3 days pay for example you should be owed £230.76 (pre-tax of course)

So as you claim you have 16.5 days owed then if you earnt £20K a year (£76.92 a day) you should be owed £1269.18.
 
Last edited:
I would go in tomorrow, tell the HR manager you have spoken to ACAS and they are working out annual leave wrongly and see what they say...
 
Ace Modder said:
I would go in tomorrow, tell the HR manager you have spoken to ACAS and they are working out annual leave wrongly and see what they say...
Click to expand...

Done this and even though they are agreeing with me, HR that is, they cant do anything about it because that is the way its worked out.
So I am in the process of submitting a grievance about it.

Interestingly though they have given me the working they have used and it doesnt involve dividing by 365 days as they previously told me but it is as follows;

20,000 ÷ 12 = 1666.66 ÷ 30 = £55.55 x 10 days = £555.5

So they are now working it out on 30 days a month?! Doesnt this mean my daily rate will change when the calender month changes?
 
You probably don't have a daily rate, you have an annual salary. The daily rate kicks in because you are leaving and they need to calculate one to assess final pay. Anyway 12 x 30 = 360 days. Where's the 20k come from?
 
mattyy said:
Done this and even though they are agreeing with me, HR that is, they cant do anything about it because that is the way its worked out.
Click to expand...

I love that quote..."We agree with you but can't do anything about it because that's the way we do it"

Well, the way you do it is wrong, so yes you can and will do something about it, namely, do it correctly! :D

Sorry, but what a shambles of a HR dept if they can't get something as basic as this right :o
 
Greboth said:
The way to calculate a weeks pay is 7/365th, rather than using working days because each year varies between 260 - 262 working days. So I wonder if someone in HR has misunderstood this and taken it to how to work out a days pay. As far as I am aware, the way to work out a days pay is:
Annual / 365 *7 / Number of days worked per week.

So for you, £39k is £149.59 a day (well £149.58904 but rounding up is better for you :) )
Click to expand...

I thought the day rate for £39k was £150 pre tax and £113.36 post tax according to salary calculators anyway.

If you use that site it works it out on a day per week and hours per day basis and comes out at exactly what I have said.

http://salarybot.co.uk/
 
Last edited:
You must log in or register to reply here.
Back
Top Bottom