Wednesday, 23 January 2013

1p per day holiday pay - how widespread is this grubby practice?


I represented a senior manager yesterday at his dismissal appeal.   There was no dispute over the dismissal - the sacking was "within a range of reasonable responses" the employer could have taken....

But what I hadn't seen before was this dismissal letter - stating that accrued holiday entitlement (upto the termination date) would be paid at a rate of 1p (yes, one pence) per day!

During the hearing, I was shown a copy of the contract of employment.  This clearly states that in instances of misconduct related dismissal, holiday pay will be paid at a flat rate of one pence per days work.

This employer is not the corner shop, this was a major employer and household name.  These contracts apply to managers and other workers not covered by collective agreements with a Trade Union.

I politely advised the employer that this was a non-enforceable contractual term, and that a County Court claim would follow if our members holiday pay was not paid. I also suggested that Unite would not pursue this route quietly, and that there was now an issue of "reputational risk" that they would be wise to consider.In other words, I threatened them!

Following an adjournment of 57 minutes, it was confirmed that "as a gesture of goodwill", our member would be paid his holiday pay.

Many workers would accept the way employers calculate holiday pay without question.  It is also common to assume that if something is written into a contract, it must be "legal".

It speaks volumes about the mindset of major corporations that dubious contractual terms are written into workers contracts, just so that the naive, the ill-informed and the non-union workers can be ripped off.

I'm now wondering how widespread this grubby practice is in non-union private sector Britain?