Commentary

(g) Calculation of a day's pay

Division BI Pay
| Commentary

(g) Calculation of a day's pay

| Commentary

(g)     Calculation of a day's pay

The determination of a day's pay may become a relevant issue when an employment tribunal is considering making an order for repayment in the context of an unauthorised deductions claim. If, for example, the tribunal finds that there has been an unlawful deduction of four days' wages then how is the claim to be quantified? In some cases (for example, where the worker is paid by the hour) the calculation may be straightforward. In others cases involving salaried workers there may be a contractual provision dealing with the issue, typically (although not invariably) to the effect that the daily rate is 1/260 of annual salary, reflecting the number of working days in the year (ie 5 days x 52 weeks). Provided that the provision in question does not result in the rate of pay falling below the level of the national minimum wage then it is submitted that this determines the matter (with the possible exception of claims for holiday pay: see para [381.12] below). However, if there is no such contractual provision the issue can be a difficult one, made more complicated by a number of conflicting judicial decisions.

The first of these cases concerned holiday pay. In Thames Water Utilities v Reynolds [1996] IRLR 186, EAT, a claim for eight days' contractual holiday pay fell to be considered under what is now

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