Pay - an overview of obligations

How to calculate guarantee pay

To calculate guarantee pay, multiply the number of hours your employee would normally have worked on the day in question (as stated in their terms and conditions of employment) by their hourly rate.

Statutory guarantee pay is subject to an upper limit of £25.00 per day. This amount changes every year. Statutory entitlement is limited to five days in any three-month period. This entitlement is reduced pro rata for employees who work fewer than five days a week.

You do not have to pay guarantee pay for voluntary overtime.

Exemptions from the statutory guarantee pay provisions

The Department for Employment and Learning can grant an exemption from the statutory provisions if you have your own collective agreement. For this agreement to be valid, all parties to the agreement must be making the application for exemption, ie you and your employee, and the guarantee payment must be as favourable overall to your employees as the statutory provisions.

The agreement must also provide a complaints procedure that either includes a right to independent arbitration in the event of deadlock, or specify that your employee may complain to an industrial tribunal - in which case the tribunal would have jurisdiction over the agreement.

The Employment Rights (NI Order) 1996 also provides for an exemption being granted by DARD where there is an Agricultural wages order under which employees to whom the order relates have a right to guaranteed remuneration.

You do not have to pay statutory guarantee pay on top of any contractual entitlement.

Employment protection rights

It is unlawful to dismiss an employee for seeking guarantee pay.

It is also unlawful not to pay guarantee pay to an employee if they are entitled to it.

In both of these cases, the employee can complain to an industrial tribunal.

The Labour Relations Agency provides an alternative to the Industrial Tribunal under the Labour Relations Agency Arbitration Scheme. Under the Scheme claimants and respondents can choose to refer a claim to an arbitrator to decide instead of going to a tribunal. The arbitrator’s decision is binding as a matter of law and has the same effect as a tribunal. 

You can find out more about the LRA Arbitration Scheme on the LRA website.

     

    Developed with:

    Department for Business, Innovation & Skills

    Labour Relations Agency

    The Department for Employment and Learning