What Should You Be Paid Whilst On Holiday?

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We are currently in the midst of a very popular time to take annual leave from work, but the law regulating and dictating what someone should be paid whilst on holiday from work is far from clear.

The Working Time Regulations 1998 (“the Regulations”) state that all workers have the right to 5.6 weeks paid leave each year. This equates to 28 days for a full time worker, including all public and bank holidays of which there are 8 each year. However, some workers are entitled, possibly under a contract of employment, to annual leave in excess of the statutory minimum.

Under the Regulations workers are entitled to be paid during statutory annual leave at a rate of a week’s pay for each week of leave. The question then is what is a “week’s pay”? How it is calculated depends on a number of factors and in particular distinction is made between a worker with normal working hours and those with no normal working hours. However, recent cases in the European Court of Justice that have been applied in the Employment Appeal Tribunal have stated that a worker needs to receive their “normal remuneration” during periods of statutory annual leave. This means that the way in which we calculate a week’s pay under the Employment Rights Act 1996 in the UK is incompatible with The Working Time Directive.

Article 7 of the Working Time Directive states that workers must have the right to “paid annual leave” but dos not state how this should be calculated. In the case of Williams and others v British Airways Plc [2011] the European Court of Justice held that a worker is not just entitled to basic pay but any remuneration that is “intrinsically linked to the performance of the tasks which the worker is required to carry out under his contract of employment and in respect of which a monetary amount, included in the calculation of his total remuneration, is provided”. Also those that relate to the “personal and professional status” of the worker. This would include payments relating to a worker’s seniority, length of service and professional qualifications.

The idea is that you should not be worse off financially as a result of exercising your statutory right to take holiday. With this in mind contractual commission and bonuses should be taken into account when calculating a week’s pay for the purpose of holiday pay. Otherwise you could be deterred from taking time off work due to the financial disadvantage you would be in. This was confirmed in the case of Lock v British Gas Trading Ltd and others [2014].

So, if your pay packet is lighter because you have taken some holiday this month or last it is possible that your employer has not correctly calculated your holiday pay. You may have a claim for the difference in pay. If you wanted to consider pursuing a claim seek our advice quickly as there are strict time scales for bringing such claims.

Jennifer Carpenter

Employment law specialist solicitor

Conveyancing Referral Fees

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You may or may not be aware that a lot of Conveyancing legal firms pay referral fees to estate agents. In exchange for this estate agents refer Conveyancing work to them.

Typically a legal firm will pay between £40 – £200 per transaction to an estate agent, who will then refer the clients to them.

There are two main issues with this.

  • The first is that the estate agents may not refer the clients to a particular firm based on that firm’s reputation but based solely on the fact that they are being paid a referral fee. In addition the client may not always be advised that a referral fee is being paid in respect of their matter and therefore may not be aware that the solicitors are effectively paying for their work, and will believe that the reason they are being referred to that practice is because they are good.
  • Secondly the client also needs to be careful that they are not being charged for any referral fees by way of increased legal fees, again this is not always disclosed when applying for costs.

Adams Harrison do not pay referral fees. We pride ourselves on the fact that much of our work is repeat business from satisfied clients, or that a client has come to us having been referred to us by a member of their family, or a friend, who has used Adams Harrison for legal services in the past. See our testimonials on the website.

If a referral fee is being paid by the estate agents to your legal advisor then your legal advisor should advise you of this fact and seek your consent to the same. You need to think carefully whether you would wish to instruct a firm that has to pay for it’s work rather than relying on its reputation.

Tracy Spilsbury

Head of Residential Conveyancing