Employer Taking Back Holiday Pay

ch2008

I recently left a position where I was on a salary. The business was closed for a week and a half over xmas and I was told I would be paid for this, and I was. I then decided to leave the company and they took back the money I was paid as they said I did not accrue the holiday days.
My problem with this is;
a) I was never told it would be holiday pay, I was just told I would be paid
b) They never told me they would be taking it back when I left
c) Im not sure they are allowed take it back, even if it was a "good will gesture" as they called it.
d) As the business was closed over christmas I had no choice in whether I took the days off or not and therefore was unable to accrue the holiday days

Any advice would be greatly appreciated

Beano

Was it taken as holidays for the other employees as well? If so then i dont see a problem with what they did. Presumably they didnt tell you they would be taking it because they didnt know you were leaving at the time? Perhaps you could clarify this for us. If you were given holidays that you hadnt accrued then they are entitled to take it back AFAIK. Similarly if you had accrued holidays you hadnt taken you would be expecting to be paid for them before you left. Finally, they can tell you when you have to take holidays. Holiday days are at the employers discretion.

ch2008

Yes, I can see that side of the argument too. I had however relied on the fact that I would get a full onths pay after I left but this has been effectively halved and I think they are doing so out of spite. If the law says they are right though I will hold my hands up. Its always a bad thing when these things get personal and I'm trying my best to be straight with them. I have however found this article which gives me some hope;

The Employment Appeal Tribunal (EAT) has decided in the case of Hill v Chappell [2003] IRLR 19, that an employer cannot recover excess holiday pay from an employee who took more than her entitlement of 20 days holiday under the Working Time Regulations.

The Working Time Regulations specify that an employee is not obliged to compensate their employer on termination of his/her employment, for leave taken which exceeds the proportion of leave they are entitled to in the leave year. The parties may however enter into a "relevant agreement", which states that the employee will compensate the employer for any leave taken which exceeds their entitlement, either by undertaking additional work or by payment. A "relevant agreement" can be the employee's contract of employment.

In this case the EAT had to decide on whether in the absence of any "relevant agreement", the employer could rely on the claw back provisions in Part II of the Employment Rights Act (ERA) 1996. These provisions allow an employer to deduct from the employee's wages an overpayment, without the employee's consent.

The EAT decided that the employer could not rely on the provisions of the ERA 1996. The EAT stated that when the employee took the time off, she was entitled to paid holiday under the regulations, and there was therefore no overpayment of wages. The EAT also stated that they could not imply a term into the contract which would allow for the deduction of excess holiday pay.

If you want to be able to recover compensation from an employee who is leaving and has taken more holiday than he/she was entitled to at the date of termination, you should provide for this in their contract of employment.

Beano

so what does it say in your contract then?

ch2008

It says nothing about my employers having the right to clawback any holiday pay given out.

Nody

And the employee handbook? I'm sure there will be a reference to it in the contract or the HR person should be looking for a new job.

ch2008

Nothing....only a small buisiness, no "HR Dept."

BC

They can take back holiday pay if you haven't accrued the holidays.

I don't think thats the issue here, the issue is whether that week counts as holidays or not. Do you have anything in writing from the company with the details of how you would be paid for that week off?

ch2008

No, it was all very informal unfortynately. The case that I outlined seemed to imply that they couldnt take it back though? Especially as I wasnt in a position to choose whether to work or not and I specifically asked beforehand whether I would be paid for these days so I wouldnt be out-of-pocket over christmas

japbyrne

can you tell us how long you were with the company.