UK Employment Law\ Employer \ Guaranteed Payments
Guaranteed Payments.
Payments are normally made if you are not provided with work on a day you were contracted to carry out tasks. An employer cannot just refuse to pay you. There are conditions: guaranteed payments are made if there is a reduction in the amount of work that you normally carry out; or if something else happens which affects the business’s normal day-to-day activities.
Payments are also subject to contract by the following:
- they are made for a complete working day lost, even if you are provided with some work and even if the tasks do not fall within normal working hours;
- your employer can make any reasonable requirements to ensure that your services are available;
- you cannot unreasonably refuse an offer of work from your boss;
- there would be no guarantee payment entitlement if the failure to provide work is because of any kind of industrial action.
The above situations do not affect whether an employer can or cannot put you on short time or temporary lay-off (unpaid or at a lower rate). However, it is affected by terms in individual contracts of employment.
Not covered in payment provisions:
- when you are self-employed or freelance;
- when you normally operate outside of Great Britain – for example: if you operate aboard offshore oil and gas rigs (in British territorial waters);
- if you are employed for a fixed term of three months or less;
- if you are engaged for the purposes of tasks that are not predicted to continue for more than three months and where you are not continuously employed for more than three months in advance of the day for which a payment would be payable;
- if you are not continuously employed by the other party for at least one month before the day for which the payment would otherwise be payable;
- when you have no normal working hours laid out by an employment contract;
- if you are crew boats engaged in share fishing (solely paid by a share of profits or gross earnings);
- if you work for the police or armed forces.
Continuous employment
This forms the basic qualification for most individual rights. This includes any rights to be given a guarantee payment.
Limit on entitlement
Statutory entitlement is limited to five days in any period of three months. This proviso is for all occasions except where you are normally required to work less than five days a week under your employment contract.
To work out whether there is an entitlement for a day’s lay-off, it must be ascertained how many days of guarantee pay have been allowed. The period in question would be the three months ending on the day being examined. The payment would only be due if you had fewer than five consecutive days worth of guarantee pay. If they are not consecutive, then the pay would be worked out separately for each day. If the days worked vary through the month, then an average would be calculated from the twelve weeks running up to the date in question.
It would be based on the employment contract applicable on the day in question, unless a new deal has been made as a result of short-time working. The government has the power to alter applicable limits to the specified number of days to which guaranteed pay relates.
Amount
The amount of guarantee payment for any day is calculated by multiplying the number of normal working hours for the day in question by the guaranteed hourly rate. However, this amount is subject to an upper limit for any one day. The limit is varied annually in line with Retail Prices Index.
The calculations should be based on the contract of employment in force on the day in question. However, if this is varied or a new contract introduced as a result of short-time working, the calculation should be based on the contract in force immediately before the short-time working began.
Normal working hours.
Your contract of employment lays out the normal working hours. The written statement of particulars may include overtime.
Guaranteed hourly rate.
This rate can be calculated by taking one week's pay, then dividing it by the number of normal working hours in a week. Any variations are averaged over the twelve working weeks leading up to the date in question. If this period is less than twelve weeks, an estimation is based on what could normally be expected from the contract and hours worked by colleagues in comparable jobs.
Effect of contractual guarantee payments.
Any payment already made under your contract of employment, for example, as a result of a collective agreement on guarantee pay, will be offset against the employer's liability under the law.
On the other hand, any payments already made for a day without work will reduce an employer’s liability.
If the contractual guarantee pay is not specified for a particular day, then the proportion that you can attribute to each day is that which relates to the specified day to any workless period.
If you are paid for a week, for work done and contractual guarantee pay, then the amount should be identified and subtracted from the total. Any sum left over will represent guaranteed remuneration. This sum should be divided over the workless period.
Does this effect Jobseekers Allowance?
Guarantee payments are taken into account, in the case of both contributory and income-based JSA, for:
- statutory provisions;
- exempted collective agreements;
- other collective agreements obliging workers to make services available on the day in question.
Dismissal for trying to enforce guarantee payment rights
It is unlawful for your boss to sack you for trying to enforce these rights by complaining to a tribunal or claiming the employer had infringed them. Anyone dismissed like this can complain of unfair dismissal. There are no provisions for length of service and it does not matter whether you actually qualified for the rights. Success in such a complaint is not even affected by whether or not the rights had actually been infringed. However, if you make a complaint, you must have acted in good faith.
Making a complaint
If you are entitled, but do not receive guarantee pay, you can lodge a complaint. This should happen within three months of the day in question. A tribunal has the discretion to accept complaints made later if it was not practicable for you to have lodged one earlier.
A copy of completed application forms (obtained from the Job Centre) will be sent to ACAS (Advisory, Conciliation and Arbitration Service). The appointed conciliator will try to gain a settlement without resorting to a hearing. If no formal complaint is lodged, you will still be able to gain the services of a conciliator.
Any details given to appointed conciliators are confidential and cannot be divulged to the tribunal, unless express consent is given.
Complaint forms can be found at Job Centres (form IT1 (IT1 (Scot) in Scotland). There is also a leaflet called "How to apply to an employment tribunal".
Tribunal hearing.
The tribunal will hear your complaint in circumstances where conciliation has not been possible or has failed. You may claim expenses, including travel and loss of earnings. Proceedings are informal in order to make it easy for you to represent yourself (if you so wish). You can choose anyone you wish to represent you. If a tribunal upholds a complaint and finds it is justified, the hearing will order the employer to pay a guarantee payment.
Tribunal decisions
If a tribunal finds in favour of your complaint, it will normally issue an instruction for the boss to pay the guarantee payment due, after deducting JSA (Jobseekers Allowance). The deduction is repaid to the Benefits Agency. Details of payments of JSA or income support are sent to your employer (a "recoupment notice"). A copy is also sent to you. Only when this is received can your employer make a payment.
Exemptions
Guarantee payment exemptions can be made by a Minister, so long as:
- the application is from all parties;
- the appropriate Minister is convinced the relevant statutory provisions do not apply;
- the agreement provides complaints procedures with a right to independent arbitration.
If the agreement is favourable, as is the corresponding statutory provision, then there would be no need for a guaranteed payment exemption. However, if your employer prefers to use his/her own complaints procedure, instead of a tribunal, then an exemption order would still be needed.
Redundancy payment
If you are put on short time or laid off, you may be able to claim a redundancy payment.
Entitlement to wages
If you believe that you have not been paid all your wages, you can make a complaint to an employment tribunal. It falls under Part II of the Employment Rights Act 1996.
