In a landmark decisiondelivered today by the Employment Appeals Tribunal, the EAT hasruled that holiday pay should include "normal remuneration" whichwill include overtime or commission.
This is a decision which hasbeen described as a "real blow to British business" and the generalconsensus is that it will cost businesses millions if not billionsof pounds.
The inevitable effect will bethat not all businesses will survive, job losses are likely andemployers will without a doubt seek to curtailovertime.
The only limiting factors arethat the right applies to the basic four weeks leave granted underthe Working Time Directive and not the additional 1.6 weeks underRegulation 13A of the Working Time Regulations. In addition,claims for arrears of holiday pay will be out of time if there hasbeen a break of more than three months between successiveunder-payments.
The EAT gave permission toappeal to the Court of Appeal and in doing so identified thatclaims for arrears of payments was an important point for the Courtof Appeal to consider. No doubt, any restraint placed uponthe eligibility of workers to bring a claim will be well receivedby employers.
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.