Holiday Pay: Could your business be at risk?

Looking out to a damp, dark Manchester morning it is hard to believe that we are now officially in holiday season! Managing leave for your staff is one thing, but have you also considered if you are paying workers correctly when they are on holiday?

The rights surrounding annual leave and holiday pay have been in a state of flux for some years.  This has led to a great deal of uncertainty for employers. In this article, we look at the recent decisions, how they affect holiday payments, and what you need to do to protect your business.

Recap: the law relating to holiday leave and pay

In brief, the right to annual leave and the associated pay is set out in the Working Time Directive, which derives from Europe.  The UK implemented the Directive into the Working Time Regulations 1998 (“WTR”) which provide employees and/or workers with 5.6 weeks entitlement per year, this translates to a basic minimum entitlement of 28 days.  There is no right to bank/public holidays but most employers usually incorporate these 8 days into the 28 day leave entitlement.  Part time workers are entitled to a pro rata equivalent.

Under the WTR the worker is entitled to be paid for the holidays taken using a formula as set out in the Employment Rights Act 1996.

Failure to properly calculate holiday pay could result in an unlawful deduction from wages claim from workers and/or employees.  Importantly, there is a mechanism which allows claims to be brought as a “series of deductions” which can link any underpayments throughout the working relationship. 

The time limit for bringing these claims is 3 months from the date of the last deduction (unless “unreasonably practicable” to do so).

Holiday pay – what to include?

The core principles from the European and national courts are that workers are entitled to be paid their normal pay during periods of annual leave, and that “normal pay” is not limited to basic pay but could include elements such as overtime, commission and allowances.

In 2014 the Employment Appeal Tribunal (EAT) heard the important case of Bear Scotland & Ors v Fulton & Ors (“Bear Scotland”) which decided that some types of overtime should be included in holiday pay.  The case also considered how far back a worker could go when claiming a ‘series of deductions’  

In this case workers tried to claim for underpaid holiday pay stretching back over a number of years.  However, the EAT decided that any period of 3 months or more between the deductions would break the series.   Given that most people have over a 3 month break between holidays, this case had the effect of preventing workers from claiming all the way back to the start of their employment (or 1998 when the WTR were introduced).

Following this decision, the government introduced legislation in 2015 to restrict any claim for underpaid holiday further by imposing a maximum 2 year backstop.

At this stage, a worker would only be able to claim for back paid holidays if they were not subject to a 3 month break, and if there was no break, then they could only go back for a 2 year period.  This significantly reduced the impact of the European cases and was welcomed by businesses.

Current position

Following the Bear Scotland case uncertainty still remained regarding the calculation of holiday pay and what constituted a ‘series’.   The case did not provide any guidance about how to calculate holiday pay where commission/bonuses and overtime are regularly paid to the worker; specifically, what period of time should be referenced to provide an average sum to be incorporated into holiday pay?  Should it be a 12 month or a 3 month reference period?

Questions were also raised about whether the ‘series’ could be broken by making a one off correct payment. 

Last month, the Northern Irish Court of Appeal provided a decision which puts the decision in Bear Scotland under the spotlight and is estimated to cost the Police Force £40 million in backdated holiday pay: The Chief Constable of the Police Service of Northern Ireland & Northern Ireland Policing Board -v- Alexander Agnew & Others. 

In summary, the court decided that police officers’ holiday pay should have included overtime and various allowances and these police officers were entitled to claim for this element of leave, with some claims dating back to 1998 (when the WTR came into force).   This puts the decision in Bear Scotland into question, as there is now doubt whether a period of 3 months or more can break the series of deductions, and therefore limit the period for the claims.  

Comment

The Agnew case is not binding on domestic courts, but this decision could be taken into account when faced with a claim for backdated holiday pay.  Further, given the significant sums involved in this case, it may be appealed to the Supreme Court.  If so, any decision made by the Supreme Court will be binding on all UK courts. 

Importantly, the court did not consider the two year cap on backdated holiday pay claims as provided for in the domestic regulations as they do not apply in Northern Ireland. These regulations are likely to be challenged in the near future as there is some concern that they are not compatible with the Working Time Directive.  

Tips for managing the risk

The is a dynamic and unsettled area of law, but it is now clear that companies must include the relevant allowances when calculating holiday pay.  Whilst some uncertainty remains, there are a number of things businesses can do in order to manage the risk of a future claim for underpaid holidays:

  1. Review your working arrangements – are there any ‘self employed’ contractors who could argue that they are ‘workers’ and entitled to back paid holiday;

  2. Perform an audit of anyone who could potentially be entitled to back pay and perform a calculation of what the financial sum this could look like;

  3. When performing calculations take into account commissions/bonuses/overtime if they are sufficiently regular and are “intrinsically linked” to the work;

  4. If a shortfall in holiday pay is established, act quickly to correct the calculations to ensure that future payments incorporate all relevant entitlements.

  5. Given the complexities in this area, if you have any queries, you should seek specialist advice.

 

Chloe Leyland image

 

 

Chloë Leyland has specialised in employment law since she qualified as a Solicitor in 2007. Chloë has significant experience in presenting and managing employment tribunal cases for both the private and public sector as well as individuals. Chloë’s main areas of expertise include the following: discrimination, redundancy exercises, unfair dismissal, whistleblowing, TUPE transfers and equal pay. 

Email: cle@haroldstock.com


Harold Stock & Co welcome the Vanarama National League North Trophy

Last week, our Stockport office were fortunate enough to receive a visit from members of the Stockport County F.C. Team together with the Vanarama National League North trophy. 

On Saturday 27th April 2019, a 3-0 win at Nuneaton saw Stockport County claim their first league title in 52 years. Their victory was celebrated by over 4000 fans who had travelled to Warwickshire with them. One of those travelling fans happened to be our very own Claire Atkinson. Claire, a specialist Wills and Probate Solicitor is a life long fan of The Hatters. 

Stockport County

(L-R) Tracey Hine, Kelly Jackson, Francesca Rigby, Danielle Eyres, Claire Atkinson, Darren McGuinness


Christmas 2018

Our offices will be closed from 4.30pm on Friday 21st December 2018 until 9.00am on Wednesday 2nd January 2019. 

We wish you a very Merry Christmas and a successful New Year. 


Receptionist/Typist

We are looking for an experienced full-time receptionist/typist to join our Stockport office. Full details of the role can be found below. 

To apply for the role, please forward your CV together with a covering letter detailing your salary expectations to our Practice Manager, Alexandra Newman by email an@haroldstock.com 


JOB DESCRIPTION

JOB TITLE:                               Receptionist/Typist

LOCATION:                               Stockport, SK2

DEPARTMENT(S):                   Front of House

SALARY:                                   Negotiable dependant upon experience

Harold Stock & Co. Solicitors is committed to equality and diversity and welcomes applications from all sections of the community


Job Purpose

To provide front of house cover for the Stockport office together with typing cover

Primary Duties and Responsibilities

You will perform a wide range of duties including some or all of the following:

Reception

  • Answer general phone enquiries using a professional and courteous manner
  • Direct phone enquiries to the appropriate staff members
  • Reply to general information requests with the accurate information
  • Greet clients/suppliers/visitors to the organisation in a professional and friendly manner and provide them with refreshments.
  • Maintenance of meeting rooms, ensuing they are kept stocked and tidy before and after all meetings.

Secretarial/Administrative:

  • Audio typing using digital dictation software
  • Copy Typing
  • Maintaining diary systems
  • Liaison with clients and other parties both in person and by phone
  • Assist with the distribution of post
  • Prepare and send outgoing faxes, mail, and courier parcels
  • Filing of documents, ensuring that a high level of accuracy is maintained at all times.
  • Photocopying and scanning.
  • Opening of new files
  • General administrative duties

Person Specification:

The successful candidate will have:

Essential:

  • Previous legal secretarial experience
  • Excellent IT skills including experience with digital audio dictation software and case management systems
  • A keen eye for detail
  • Ability and willingness to learn new skills
  • Ability to work within a team
  • Ability to work flexibly
  • Ability to work to strict deadlines
  • A commitment to Equal Opportunities

Desirable:

  • A full clean driving licence and own car is preferable although not essential

Elf Day 2018

Staff from our offices took part in Elf Day to raise funds for the Alzheimer’s Society. They raised over £340! Well done to everyone that took part.

The highlight of the day for most was the opportunity to Pie Face Paul Stock together with Tom Simpson, Scott Turner-Percy and Claire Atkinson. Unfortunately, Mr Stock wouldn’t allow the moment to be caught on camera but we can assure you it did happen!


Harold Stock & Co show their pedal power for Road Safety Week

We held a Virtual Cycle on 20th November 2018 at our Stockport office to raise funds for Brake, the Road Safety Charity. 

Collectively, we cycled 100.05km and have raised £210 so far. You can still donate to our Fundraising page https://www.gofundme.com/haroldstockvirtualcycl

Special thank to our super cyclists: Tom Simpson, Debra Woolfson, Francesca Rigby,  Kirsty Dunn, Tracey Hine, Danielle Eyres, Wendy Smith, Niamh Darraugh, Scott Turner-Percy, Darren McGuinness and Kelly Jackson. 

 

 


Virtual Cycle Challenge – 20th November 2018

 

 

 

 

 

 

Our staff are taking part in a virtual cycle event on 20th November 2018 between 10am and 2pm at our Stockport office. 

There will be a charity bake sale on the day and a prize draw.  Donations can be made on our Go Fund Me page www.gofundme.com/haroldstockvirtualcycle. All funds raised will help Brake to support bereaved families and victims of road traffic accidents. 

 


Vacancy – Residential Conveyancer

Harold Stock & Co. Solicitors is looking for an experienced Residential Conveyancer to join our thriving team based in our Mossley office.

You will be experienced in handling a caseload of all types of transactional work, including but not limited to purchases, sales, remortgages, transfers, equity releases, shared ownership transactions, and dealing with registered and unregistered properties.

This post is open to qualified Solicitors, Licensed conveyancers and experienced non-qualified conveyancers. This role may be suitable to an experienced conveyancing legal secretary looking to take the next step in their career. 

Salary negotiable dependent upon experience. 

To apply for this position, please forward your CV together with details of salary expectations to our Practice Manager, Mrs Alexandra Newman via email to an@haroldstock.com 

 


 

JOB TITLE:                            Residential Conveyancer/Solicitor

REPORTING TO:                  Head of Department

LOCATION :                           Mossley, Tameside

SALARY:                                 Dependant upon experience

Harold Stock & Co Solicitors is committed to equality and diversity and welcomes applications from all sections of the community.


Duties include:-

  • Handling a caseload of all types of transactional work, including but not limited to purchases, sales, remortgages, transfers, equity releases, shared ownership transactions, and dealing with registered and unregistered properties, to the required standard of service as set by the Firm.
  • Ensuring use the Firm’s Case Management and Web-based tracking systems to the required standard
  • Bringing to the attention of the Departmental Manager any matters of concern on a transaction that could result in a financial or professional liability to the Firm
  • Undertaking any other tasks reasonably requested by the firm to assist in the progression of transactions from receipt of file to close of the file.
  • Liaising with the administrator to ensure tasks performed and file progressed in a timely manner
  • Contributing ideas to improve client service and departmental performance
  • Contributing ideas for the development of the case management system

PERSON SPECIFICATION

The successful candidate will have:

ESSENTIAL:

  • A minimum of 3 years residential conveyancing experience
  • Proven experience of handling all types of conveyancing transactional work from end to end. .
  • Ability to work self sufficiently
  • Excellent customer service skills
  • An ability to work with a case management system, databases and normal office IT systems.
  • Ability to work within a team
  • Ability to communicate effectively with fellow employees at all levels of the business
  • A commitment to Equal Opportunities

DESIRABLE

  • A desire to contribute to the overall strategic vision for the department.

Will Aid 2018

 

November is Will Aid month and Francesca Rigby from our Stockport office will be taking part this year. Will Aid is an annual fundraising event involving 9 of the UK’s leading charities. With the support of the legal profession, donating their time and skill, people are encouraged to have a will professionally written by a Solicitor whilst raising funds for charity. 

For a suggested donation of £95 for a basic single will or £150 for basic mirror wills, Francesca will meet with you at our Stockport office to take your instructions and then prepare a will specifically tailored to suit your needs. 

For more information on Will Aid and to help you prepare for the meeting, Will Aid have produced a helpful guide and Will Planner which can be found here

To make an appointment to see Francesca during Will Aid month, please contact us on 0161 456 5012 or complete the contact form on this page.