The Glasgow Employment Appeal Tribunal has today made a landmark decision in relation to overtime and payment of this during holiday periods. This may significantly affect how overtime is paid and may also result is numerous backdated claims from employees who feel they have been paid incorrectly in the past!
A number of cases were recently heard in the Employment Appeal Tribunal concerned appeals in connection with the calculation of holiday pay
In a nut shell the Appeal Tribunal was asked;
The Appeal Tribunal dismissed the appeals of the Employers. This is significant and will have a huge affect on overtime payment in the future! The main points worth noting are;
What does this mean?
The Appellants may choose to appeal to the Court of Appeal but for the moment all employers MUST note that when paying an employee their annual leave entitlement (holiday pay) they must consider overtime (whether voluntary or not) and other premiums in employers’ holiday pay calculation if said overtime or premiums are paid in that employees “normal pay”.
As an added complication, this decision relates to the four weeks’ holiday pay that workers are entitled to under European law. It does not apply to the additional 1.6 weeks’ holiday that workers receive under UK law.
Unfortunately this means that employees can now claim for backdated holiday pay that they should have been paid relating to overtime or other employee benefits paid in the normal way! Backdated payments could be for p to one year!
What should you do?
If an employee approaches you to make a claim for backdated holiday pay you should contact us immediately. There may be an argument that no payment is due or ways in which we can limit the liability to you. We will treat assess each case on its own merits and provide you with clear and concise advise whilst aiming to keep any additional cost to a minimum. Should you have a question please do not hesitate to contact our Sarah Dodds on 01698 373 365 or firstname.lastname@example.org.
This article was written by admin