John Lewis Admits not Paying Correct Holidays
The John Lewis Partnership has recently reviewed its holiday pay policy, and realised its partners (John Lewis parlance for employees: its 85,500 permanent staff are “Partners” who own the shops across the UK) have not been paid correctly under the Working Time Regulations .
The cost of the repayments to the John Lewis Partnership is estimated at around £40 million, an average of nearly £500 per partner.
From the limited information in the press release , it appears that the partners were not being paid the full equivalent rate to when they would have been working, premiums paid for working Sundays/bank holidays.
A principal objective of the Working Time Regulations is that workers are not worse off when taking their annual leave comparable to if they were working. By not paying the value of premiums during annual leave, staff would have lost out, and could have been discouraged to take leave as a consequence.
Calculating the pay for annual leave can be confusing, and if an employer the size of John Lewis has managed to get it wrong for seven years, so too could many small employers. It might not cost you £40 million, but if the statement of particulars isn’t clear enough to allow workers to calculate leave entitlements properly, claims could be made in the employment tribunals for any deductions from leave, and for a failure to provide a statement of particulars complaint with section 1 of the Employment Rights Act 1996.
And with many employers still using terms such as “20 days plus bank holidays”, a policy that leads to incorrect advice even from some professionals in the HR industry on business forums (and which would also fall foul of requirements to ensure calculations on leave entitlements can be easily made) , the possibilities of exposing your business to a claim are significant.
It won’t cost you to find out how Employment Law Clinic can help, and we’ll even provide a free review of your employment contracts to advise whether they need attention – just fill in the form below, or email firstname.lastname@example.org with a copy of your current terms and we’ll be in touch.