Former employer and "average" holiday pay query.

[azzadle]

Hi,

Fairly new here.. this could potentially be a long post, so apologies in advance. Any help or advice would be massively welcome as this is a nightmare.

I used to work for a PPI claims company as a claims "handler" (CH) - the entire process worked on referrals only and there was no cold calling. I used to work in admin but was asked to be a handler in October 2018.

This job was a pipeline or momentum based job, involving a lot of luck if anything. To begin with, you were given a bundle of leads that enquired through the company website and talked them through to process to get a pack of paperwork sent out, the client signed it, returned it, we started their PPI investigation. We would get paid on a progressive scale depending on the number of signed packs we received in a calendar month.

On top of this, we also earned "points" for completing PPI questionnaires with customers who we had found a Yes PPI response for. These questions were very heavily led, but we'd complete a lot in a month and most of these clients called in after us notifying them.

We also received bonuses if we didn't "breach" on any of our audited calls in a month. You could also lose commission on this element too if you failed 2 or more. A failure could be as petty as not pressuring the client into posting on Facebook to encourage their friends and family to sign up too.

So your pay works out as (Pack pay + points) x audits + basic salary = Gross pay for the month. The company, in all fairness, did pay EXTREMELY well. I earned up to 3 times my salary in bonuses in some months.

On 29th August when the PPI deadline passed, everyone was made redundant and went on to new jobs. However, I raised the point that when taking holiday, the company failed to pay an average of the previous 12 weeks earnings. What they did do is reduce your monthly packs target by 25% if you took 5 or more days annual leave (AL) in a month. Any less than this, and you were forced to do overtime to try and hit your target and any more than 5 days wasn't rewarded with a further reduction. Fail to do overtime to make this up and you'd be torn apart by management.

Earlier in 2018, I queried this with management as my previous department didn't get any sort of reduction on targets for taking holiday. The company agreed they were wrong and paid my entire department including myself the difference. I was warned by a director in said meeting that the owner "knew who I was now" and that I should "be careful who I upset". He also said that he didn't want Claims Handlers to hear of this because it would cost the company a small fortune. I was also told that I couldn't progress to a handler for 6 months because I'd cost the company money.

Upon leaving the company, myself and several others raised the issue with the management and received the reply that I'll attach. Personally, I think a lot of it is waffle and my comments are in red, but they refused to pay up.

I'm aware that if there is a break of more than 3 months between AL dates, you may not claim for anything prior. In April 2019, a director sent a company-wide email stating that all handlers were barred from taking holiday in June, July or August due to "business needs" - perhaps this is a coincidence.. there wsn't a sharp upturn in business until mid/late July anyway.

Having calculated my claim and 2 others, all 3 are around £1,500 each. There are 15 of us in total. I've gone to ACAS who did nothing, so they've issued an early conciliation certificate. We're now progressing to a tribunal.

My queries are;

- How far back can we claim for this?
- Do we have a valid point?
- Will the previous payment and subsequent warning have much clout, if any?
- Will their 3 month ban on AL affect us in any way, and are they entitled to do this?

I just want to know where I stand before appearing in a court!

Thanks in advance!

[ULA]

Sorry for the delay in responding. I have a couple of questions:

1. What did your contract of employment state about how holiday pay would be calculated?

2. Is your holiday entitlement the statutory minimum?

3. Do you have fixed hours of work?


To try an answer some of your questions:

1. Holiday pay needs to be calculated based on the preceding 12 week reference period and in most cases it will not be possible to just use the last 3 months of wage data as it is unlikely it will correspond with the reference period. The holiday pay reference period should start from the last whole week from Sunday to Saturday ending on or before the first day of the leave. In the case of monthly paid employees, if you took a day's leave mid-week then the first week used to calculate holiday pay will be the preceding week's pay earned between Sunday and Saturday.

2. If there is a series of underpayments, then a claim must be brought within three months of the last in the series and only 2 years of back payments can be sought. If there is a three month break in the series of deductions, the deductions which occurred before the break cannot be recouped.

3. Bit unclear as to the issue in reduction in targets for when someone is on holiday, what should actually happen is that if an employee takes a period of leave within the 12-week reference period, then any weeks on which no pay was due, should not be included. Instead, additional earlier paid weeks should be included to achieve the 12-week total.

4. A company is entitled to have periods of time when no holiday is allowed such as in peak times for business needs but a 3 month consecutive ban over the summer period, which in the UK is traditionally the time at which people take holidays, may be seen by the tribunal as excessive.

Hope that helps but if you have any further questions then just pop back to this thread.

[azzadle]

Sorry for the delay in responding. I have a couple of questions:

1. What did your contract of employment state about how holiday pay would be calculated?

2. Is your holiday entitlement the statutory minimum?

3. Do you have fixed hours of work?


To try an answer some of your questions:

1. Holiday pay needs to be calculated based on the preceding 12 week reference period and in most cases it will not be possible to just use the last 3 months of wage data as it is unlikely it will correspond with the reference period. The holiday pay reference period should start from the last whole week from Sunday to Saturday ending on or before the first day of the leave. In the case of monthly paid employees, if you took a day's leave mid-week then the first week used to calculate holiday pay will be the preceding week's pay earned between Sunday and Saturday.

2. If there is a series of underpayments, then a claim must be brought within three months of the last in the series and only 2 years of back payments can be sought. If there is a three month break in the series of deductions, the deductions which occurred before the break cannot be recouped.

3. Bit unclear as to the issue in reduction in targets for when someone is on holiday, what should actually happen is that if an employee takes a period of leave within the 12-week reference period, then any weeks on which no pay was due, should not be included. Instead, additional earlier paid weeks should be included to achieve the 12-week total.

4. A company is entitled to have periods of time when no holiday is allowed such as in peak times for business needs but a 3 month consecutive ban over the summer period, which in the UK is traditionally the time at which people take holidays, may be seen by the tribunal as excessive.

Hope that helps but if you have any further questions then just pop back to this thread.

Hi, thanks so much for replying

1 - There were absolutely no specifics surrounding holiday pay!

2 - Yes, 20 working days plus BH's.

3 - The contract said "your working hours are 37.5 hours per week made of up of 2 'early' shifts (8.45am-5.30pm) and 2 'late' shifts (11.45am-8.30pm), with 1 hour unpaid for lunch,. On Mondays we were also made to work an extra hour unpaid which didn't make up our core hours as well as 1 Saturday a month unpaid. The exact wording for the Saturday was "you are expected to work 1 Saturday a month unpaid due to business needs"!

I'm aware of the 12 week reference but how is this going to work if we are paid monthly? That one stumped me a little.

There are breaks in some employees claims looking at it, however almost all of these are because of the 3 month hiatus on AL that was enforced upon us by the company, not by choice. A lot of people took 1 or 2 days most months from what I've seen.

Is the company reducing targets by 25% permissible as opposed to paying us average pay for that week? It's not something we're querying, as a 25% reduction is fair to an extent, however this could have had a knock-on effect in the following month, as it generally took 4-6 weeks to get back to the level you were at prior to taking AL.

Thanks again!

[ULA]

Thanks for your response.

Thank you for your response.

Based on statutory minimum holiday with a fixed number of hours each week then the 12 week reference period is slightly more complicated because as I stated in my post #2 simply using 3 months of pay data may not correspond accurately with a 12 week period.

Therefore, in deciding when the pay reference period should start it would be from the last whole week from Sunday to Saturday ending on or before the first day of the leave. In the case of monthly paid employees, if you took a day's leave mid-week then the first week used to calculate holiday pay will be the preceding week's pay earned between Sunday and Saturday. Records of hours worked will need to be used to confirm how much an employee is owed for weeks which fall in pay months that do not fall completely within the pay reference period. This will be where a pay reference period straddles 2 calendar months or where a pay reference period ends part-way through a month.

In my opinion the company cannot reduce the target by 25% in a week in the pay reference period if someone was away for that week. What should actually happen is that this should not be included. Instead, an additional earlier paid week should be included to achieve the 12-week total.

Hope that helps.