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Bath University UCU - fair holiday pay for hourly paid staff

27 November 2014 | last updated: 22 January 2016

The fair payment of holiday pay has been in the national news recently.

In early November this year (2014) an Employment Appeal Tribunal found in favour of the Unite union in its claim that employers must include contractual overtime and not just basic pay when calculating holiday pay

Closer to home, UCU at the University of Bath have also exposed their employer on the calculation of holiday pay and in the process have won significant back pay for hourly paid staff at the institution. Following a tip off from a postgraduate student, it came to light that the University of Bath was paying its hourly paid staff the wrong holiday pay rate.

Bath, like many other employers in further and higher education, pays its casualised teaching staff a rolled up holiday pay element on top of the established hourly rate. Following recent European Court of Justice judgments, rolled up holiday pay may technically be unlawful unless an employer makes it clear that payments in lieu of holiday actually being taken are paid in a clear, comprehensible and transparent way on top of basic hourly pay. This is what most employers who are using large numbers of casualised staff in fact do. Providing that the contract or written particulars of employment make it clear what the holiday rate is, how it is calculated and make it clear that holiday can be taken, the practice may be lawful.

In the case of the University of Bath, the branch identified that holiday pay was being calculated on the wrong rate. Holiday for casualised workers at the university is calculated against the legal minimum holiday allowance contained in the Working Time Directive which is 5.6 weeks per year (28 days). 5.6 weeks equates to 12.07% of a working year (calculated by dividing the 5.6 holiday weeks by the 46.4 weeks (52-5.6) worked where holiday would be accruing). 

To derive the correct holiday pay rate for casualised staff then, an employer should add 12.07% of the hourly rate on and clearly indicate that this is holiday pay over and above hourly pay. Bath UCU noticed that hourly paid staff at the university were being paid holiday pay calculated on 10.7%. The branch, with Regional support and together with UNISON colleagues pressed the employer to pay the correct rate and in late October the university agreed to pay the proper rate but wouldn't agree to backdate underpayments. Following further pressure, including a campaign encouraging all affected staff to inundate HR with individual claims for their back-dated holiday pay, the university has now agreed that it will settle all underpayments for all hourly paid staff who are still under contract.

This is a significant win for the branch at Bath and they are rightly using it to promote union membership among hourly paid staff at the university. Branches and members more widely should take the opportunity to ensure that where 'rolled-up' holiday pay is being used it is being calculated properly, set out clearly and that staff are able to actually take their leave.