I am in correspondence with my late husband's employer over the payment of untaken annual leave accrued at the date of his death. He was in salaried employment paid monthly in arrears. I have done some research and have found an Employment Appeal Tribunal case from 2002 (Leisure Leagues UK Limited -v- Maconachie) which indicates that the annual salary should be divided by the number of working days in the year and not by the number of calendar days. This is certainly the method I have always used but the employer is using a slight variation on the calendar days method. I appreciate you are accountants and not lawyers but I assume many of you provide a payroll service. What method do you use?
Candace Orr
Replies (4)
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Case law
IACR Rothamsted v Mr R.M.Jenkins - following on from the Thames Water v Reynolds case states that, in the absence of any other contractural term, the denominator and numerator of the fraction should be based on calender days, not working days.
http://www.ucc.ie/law/restitution/archive/englcases/jenkins.htm
Denis McCarthy
Tax Consultant, IRPC Taxation Services, a division of Croner Consulting
Use working days
I have always used 260 working days in the year:
52 weeks * 5 days in the week for Mon-Fri.
Using 'their' method, could you then assume that if you had 5 days accrued leave, you should also get paid for the weekend that would fall at the end of the leave period had it been actually taken?
If they do calculate holiday pay at 1/365 of annual wages, then they also have to pay for weekend days, or else you are just being diddled!
Same as Tom
Agree with Tom:
annual salary /52 /5 = day rate. We use this as providers of payroll services and I know of other payroll providers that make the same calculation