Holiday Blues

In a landmark decision delivered today by the Employment Appeals Tribunal, the EAT has ruled that holiday pay should include "normal remuneration" which will include overtime or commission. 

This is a decision which has been described as a "real blow to British business" and the general consensus is that it will cost businesses millions if not billions of pounds.

The inevitable effect will be that not all businesses will survive, job losses are likely and employers will without a doubt seek to curtail overtime. 

The only limiting factors are that the right applies to the basic four weeks leave granted under the Working Time Directive and not the additional 1.6 weeks under Regulation 13A of the Working Time Regulations.  In addition, claims for arrears of holiday pay will be out of time if there has been a break of more than three months between successive under-payments.

The EAT gave permission to appeal to the Court of Appeal and in doing so identified that claims for arrears of payments was an important point for the Court of Appeal to consider.  No doubt, any restraint placed upon the eligibility of workers to bring a claim will be well received by employers.

Posted on: 04/11/2014

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.

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