What is Relevant Daily Pay (RDP)

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Last Updated: Wednesday, 26 February 2025 14:33

RDP stands for Relevant Daily Pay and is defined as such under the Holidays Act 2003 and later amendments.

Its purpose is to ensure an employee does not miss out on remuneration because of absence due to sickness, either for himself or to a family member under his care, or a bereavement.

Simply an employee should be paid the same amount for the absence as if the day had been worked. This is mostly easy to determine when the employee works set hours for each day. The problems begin when it is difficult, or even impossible, to know this before the fact and where the employee may not be paid at the same rate.

If the employer and employee cannot agree on a fair value, it is possible to make a calculation under the Holidays Act to determine a value. The latest amendment to the Act now names the calculation as average daily pay. (ADP) It is calculated from the employees total earnings for the previous 12 months by dividing it by the number of days the employee worked (got paid or was on leave) in that period. The important point to note is that the actual hours worked on any day don't affect the average. There are no part days - they either did, or didn't, work (got paid) for a given day.

The employee must then be paid an amount no less than the above calculation for each paid day absent. It does not matter what actual time or rate is used, just that the product of the two results in the calculated ADP value for the day.

It is not necessary to apply the calculated ADP value, [aka sect 9.3] if the actual hours for the day concerned were known at the time, in which case the known hours are entered instead. e.g An employee was scheduled to attend an 8 hour course that day instead of being on the road. KeyPay just suggests the hours required to pay at the current ordinary rate to achieve the ADP amount, and that time can be altered during entry.

KeyPay also allows a nominated figure to be used. This cannot be less than the calculated value, but does permit an agreement between the parties for a fixed standard amount making for easy payment. A warning is given if this becomes less than the calculated ADP.