Holiday pay with a new contract
The rules for calculating holiday pay have been regulated, in particular, in the Regulation of the Minister of Labor and Social Policy of 8 January 1997 on detailed rules for granting holiday leave, determining and paying remuneration for the holiday and cash equivalent for the holiday - hereinafter referred to as the holiday ordinance (Journal U. of 1997 No. 2 item 14 as amended). Determining the remuneration for the employee's leave is based on the calculation of the average salary for the last 3 calendar months preceding the start of the leave. It is worth noting that in cases of significant fluctuations in the amount of remuneration components, these components may be taken into account when determining the holiday pay in the total amount paid to the employee in the period not exceeding 12 calendar months preceding the month of commencement of the leave (§ 8 of the holiday regulation). According to the general rule resulting from Art. 172 of the Labor Code, the employee should receive remuneration for the leave in the amount analogous to the situation in which he would normally perform work.
Principles of calculating holiday pay
"The remuneration for the holiday leave is determined taking into account the remuneration and other benefits from the employment relationship, with the exception of:
one-off or non-periodic payments for a specific task or achievement,
remuneration for the time of readiness to work and for downtime not caused by the employee,
jubilee bonuses (prizes),
remuneration for the holiday leave, as well as for other justified absence from work,
cash equivalent for annual leave,
additional remuneration of a legal advisor for representation in court,
remuneration for the period of inability to work due to illness or isolation due to an infectious disease,
the amount of compensation for the remuneration for work up to the amount of the minimum remuneration for work,
awards from the company's bonus fund, additional annual remuneration, receivables due to participation in profit or in the balance surplus,
retirement or disability severance pay or other severance pays,
remuneration and compensation in the event of termination of employment ”(§ 6 of the holiday regulation).
The remuneration components specified in a fixed monthly rate are included in the holiday pay in the amount due to the employee in the month of taking the leave (§ 7 of the holiday ordinance).
How to calculate holiday pay?
According to § 9 of the holiday regulation, "holiday pay is calculated as:
dividing the basis of the assessment by the number of hours during which the employee worked in the period for which the basis was determined, and then
by multiplying the remuneration for one working hour determined in this way by the number of hours that the employee would have worked during the leave as part of the normal working time, in accordance with the schedule of working time applicable to him, if he did not take the leave at that time ".
Pursuant to § 12 of the holiday ordinance, "remuneration components paid for periods longer than one month are paid on the agreed payment dates for these components, with the holiday period being treated as equal to the period of work. The period of annual leave in the scope of the right to a deputy is treated on an equal footing with the period of performing work ”.
According to the judgment of 20 July 2000 (I PKN 17/00), the so-called a discretionary bonus, which is not of a claim nature, does not constitute an element of remuneration for work and therefore does not fall within the concept of holiday pay. On the other hand, on the basis of the judgment of 22 September 2000 (I PKN 33/00), the bonus paid from time to time for periods varying in their length is a periodic benefit to which the exemption provided for in § 6 point 1 of the holiday regulation does not apply (cf. Wronikowska Ewa, Commentary to the regulation on the detailed rules for granting holiday leave, determining and paying remuneration for the holiday and cash equivalent for the holiday).
The employee's remuneration includes the base salary of PLN 4,000 per month, a functional bonus of PLN 150 per month and a variable bonus of 10% of the basic salary (10% of PLN 4,000 = PLN 400). In June, an employee took 14 days off. Her remuneration in June will be the same as in the previous month, i.e. PLN 4,550 (4,000 + 150 + 400). The wage components in this example are fixed monthly amounts which should be included in the holiday pay in the month of the holiday taking.
How to calculate holiday pay in the event of concluding another employment contract with an employee?
In the event of entering into another employment contract with an employee and adding unused vacation to the new employment contract, the vacation remuneration is calculated according to the above-mentioned principles. It is worth remembering to count the monthly variable remuneration components only for the duration of the current employment contract, without taking into account the remuneration components applicable to the previous contract.
To calculate the holiday pay, we take into account the components of the monthly remuneration in a fixed amount in the given month in which the employee takes the leave. On the other hand, remuneration components such as: commission, monthly bonus - paid in a different amount, internship allowance, variable commission, fixed function allowance, are included in the total amount paid to the employee during the 3 calendar months preceding the month of the commencement of the leave. Variable monthly salary components, the amount of which varies significantly from month to month, may be calculated in total over a period not exceeding the 12 calendar months preceding the month in which the leave begins. An example may be a piecework wage (specified amount for an operation, activity, product), hourly wage, variable monthly bonuses (% of the base salary, if the amount of remuneration is not fixed), variable monthly commissions (% on the value of sales, turnover).
It is important that when calculating the holiday pay, the base includes remuneration components paid at a specific time, regardless of the month for which they were due.
It should be remembered that the above rule will not apply to counting the variable components of remuneration due from employment contracts that have been terminated, but employment is still continued under a subsequent contract.
The above position was confirmed by the Labor Law Department of the Ministry of Family, Labor and Social Policy, which confirmed that the transfer of the holiday leave from the previous employment contract pursuant to Art. 171 § 3 of the Labor Code is not tantamount to transferring the variable, monthly remuneration components paid to the employee under the previous employment contract that has already ended.
The employee was employed for a specified period from March 1, 2016 to March 31, 2017. Another employment contract was concluded for the period from April 1, 2017 to December 31, 2017. The employee signed an agreement with the employer to transfer the unused 10 days of leave from the previous one employment contract for the next employment contract. Pursuant to the first contract, an employee received a basic salary of PLN 4,500 and a bonus (a different bonus amount for each month). The second employment contract was concluded for a half-time job with a basic salary of PLN 2,250 and a variable bonus. In June, the employee used 10 days of vacation leave. Therefore, she should receive a monthly salary for June in the amount of PLN 2,250 together with the due bonus. In addition, she will be entitled to holiday pay on the variable components paid in April and May 2017.
In conclusion, it is very important that holiday pay includes remuneration components that are fixed and repeatable. Pursuant to the ordinance, the components of remuneration have been divided into components set at a fixed monthly rate, components of remuneration paid for periods longer than one month, components for periods not longer than one month, with a variable amount.In the event of continuation of employment by an employee with whom the employer has concluded another contract with an agreement on transferring the remaining vacation days to a new contract, when calculating the vacation pay, variable remuneration components resulting from the previous, terminated employment contract cannot be taken into account.