Term-time severance settlement.

[Guest]

When employed term-time only but paid worked weeks plus accrued holiday entitlement in 12 equal payments, what calculation is used to work out the weekly rate of pay to then calculate a settlement? Also, if the employee has been on long term sickness absence, are they entitled to the holiday pay accrued? Example (not actual figures) Employed 25 hours per week at £10 per hour. 40 weeks worked and 5 weeks holiday entitlement given. Annual salary = 25 * £10 = £250 £250 * 45 = £11250 Paid at £937.50 per month over 12 months Example of proposed settlement 12 weeks notice pay 10 weeks (equiValent to redundancy entitlement) Employee has been absent on sick leave for 15 weeks. I assume that the weekly rate would be £250 and the employee would also be entitled to payment for holidays accrued while on sick leave. Employer claims the weekly rate for calculation is the annual salary divided by 52 (eg. £216.35) And that holiday pay form part of the salary so no payment is due.

[Amethyst]

I'm not sure on the sickness part and I'll tag Ula for you, but I think you're right on the 12 week calcs, You actually work for 40 weeks and have 5 weeks holiday ( which you can't take within the 40 weeks term time) so you are employed for 45 weeks a year, thus your annual salary should be divided by 45, NOT 52.... you're paid 12 times a year for convenience sake ( for you and employer )….

Had a quick scout for case law - so Gilbert seems to be the main one from 2001 -> https://www.bailii.org/uk/cases/UKEA...4_00_1204.html and more recently https://www.employmentcasesupdate.co....aspx?i=ed7905 - can't see anything more recent than that ATM but I'll have a look tomorrow if needed

[ULA]

Hi the links Amethyst has provided are very useful and clearly set out that the salary calculation should be based on 40 weeks plus pro-rata of 5.6 weeks holiday pay.

Effectively what the employer is saying is correct in the fact that holiday pay forms part of the salary so no payment would be due as the accrued holiday is already taken account of, however the issue is they are calculating the weekly rate on the wrong premise i.e. 52 weeks not actual weeks. The easiest way to do the calculation for the payment is the notice pay and severance based on the hours worked x hourly rate then in addition they pay for any accrued but "not taken" holiday pay. Well that is now I would do it.