
The Academies Financial Handbook is updated annually by the Department for Education and the Education and Skills Funding Agency; it contains a number of governance requirements for academy trusts.
The current position in respect of calculating holiday pay could cause widespread financial damage at a time when housing providers are under increased pressure to demonstrate value for money, one way of which is through saving costs. In particular, housing providers are more frequently expecting workers to be on-call for emergency housing repairs, perhaps to assist with delivering high tenant satisfaction, or are including performance related pay or productivity bonuses as a way of retaining and motivating the workforce.
However, how far should the decision lead you to change the approach to the calculation of holiday pay where overtime, premium payments and commission may be paid to your workforce?
Under UK law, a worker is entitled to 5.6 weeks' (28 days) annual leave in each leave year, made up of 4 weeks' EU entitlement and an additional 1.6 weeks' granted by UK law. On top of this, it is not uncommon for housing providers to allocate further days of holiday on a contractual basis to employees. Whilst legislation confirmed that holiday pay should be based on a week’s pay, it did not historically set out what should be included within that payment. UK law was therefore at a point where workers were paid based on a week’s ‘normal remuneration’. Overtime and commission were not historically viewed, and therefore not calculated, as part of ‘normal pay’ for a worker.
The case of Bear Scotland v Fulton changed this. It is now accepted that ‘normal remuneration’ can include payments for overtime which a worker is required to work, but which an employer is not obliged to offer. Further, and more importantly, overtime should also be taken into account when calculating a week's pay when payments for such overtime form part of ‘normal pay’.
As the decision impacts most upon those who have normal working hours but receive a variation in their pay, perhaps because of the type of work carried out or where they work more than their contacted hours, it is crucial to determine what is regarded as ‘normal pay’ to ensure the correct and consistent approach to the treatment of such payments. The impact of the decision turns on the assessment of whether the work is regarded as:
It will also be worth assessing whether there has been a break of more than three months between successive underpayments, potentially limiting back-pay liabilities.
On the back of the judgment therefore, going forward, it will be important to give careful consideration to the individual circumstances of overtime, on call or bonus payments made to consider whether your holiday pay arrangements could come under close scrutiny. Whilst it is anticipated that Regulations from the government are likely to limit underpayments to the last two years, these Regulations are not expected to come into force until 1 July 2015 and immediate action is advisable.
Contact Kate Watkins.
The Academies Financial Handbook is updated annually by the Department for Education and the Education and Skills Funding Agency; it contains a number of governance requirements for academy trusts.
Supreme Court publishes key decision for those working in the UK’s gig economy.
From 6 April 2021, it will be the responsibility of medium and large private sector organisations to assess whether contractors working through an intermediary come within the ambit of IR35.
The 'Chocolate Snowman Appeal' is an amazing initiative that Anthony Collins Solicitors' (ACS) employees take part in every year.
The Building Safety Bill (the Bill) is said to be the most significant and wide-ranging change to the regulatory environment for higher risk building (HRBs) for over 45 years.
On 4 November 2020, the Restriction of Public Exit Payments Regulations 2020 (the Regulations) came into force; exit payments for the public sector were capped at £95,000.
The case was brought by the Official Receiver who sought disqualification orders under section 6 of the Company Directors Disqualification Act 1986 (CDDA 1986) against the seven trustees of Kids Company and its CEO. It illustrates well the tension between the role of a fulltime paid CEO of a large charity and the role of its board as voluntary trustees/directors.
At the end of 2020, The Charity Governance Code was updated or 'refreshed' as it is termed on its website.
Anthony Collins Solicitors is today (Thursday 11 February) revealing the scale of its social impact during 2020.
In their first podcast of this series, current and future trainees will discuss their journey and route to securing a training contract at Anthony Collins Solicitors.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.