A party seeking to restrict another's commercial activities must consider whether such terms are normal in similar, factual and contractual circumstances.
Calculating holiday pay and entitlement is rarely a pleasure and almost always a chore! The Royal Borough of Greenwich is, however, wishing it had spent more time on that particular chore as the Council is facing an estimated £4m settlement bill following a five-year dispute over holiday pay for its term-time workers.
The claim, bought by Unison on behalf of over 400 workers (cleaners, teaching assistants, catering staff etc.) was triggered when a cleaner back in 2012 noticed she had lost a significant amount of pay when her contract changed from a full-year to a term-time only one.
Unison claimed that the formula used by the Council, which dated back to 2008, to calculate holiday entitlement for term-time-only workers was faulty. So much so that some staff claimed they were missing out on up to five days’ holiday.
In simple terms, the Council’s calculation used the term-time contracts’ weeks worked (39 weeks) as a fraction of the full-time contracts’ weeks worked including holidays (52.179 weeks). Unison argued that the calculation was not comparing like with like. The calculation should use term-time contracts’ weeks worked (39 weeks) as a fraction of full-time contracts’ weeks worked (44.4 weeks).
The Council settled the case rather than face a lengthy Tribunal claim and the potential cost in legal fees and backpay. Whilst that might be prudent on their behalf, it means that we don’t have a definitive judgement nor any written reason as to why the Council had adopted this formula or indeed whether it was faulty.
In the absence of a judgement and in light of the rather onerous threat of the Assistant General Secretary of Unison to pursue other employers who have made similar errors, it would be wise to review the calculation of holiday pay for term-time workers and ask the following questions:
- Is there a formula in place with sufficient detail to explain its reasoning?
- Is this formula correct – does it compare like with like?; and
- If the answers to the questions above are vague, do we need to review and seek advice?
For help with reviewing your holiday-pay calculations, please get in touch with Katherine Sinclair or a member of our employment team.
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