Employment Appeal Tribunal
An Employment Appeal Tribunal decision has recently been reported in the news which may have implications for thousands of employers and their staff. The case related to an employee who worked a 35 hour week in additional to working overtime to cover for colleagues. The employee felt that the holiday pay he received should reflect the salary he was paid, and not just his basic salary. The Employer argued that this overtime was voluntary, and that the employee's holiday pay should only take into consideration his basic pay, which was the basis for calculating holiday pay entitlement.
The Tribunal took the decision that the number of hours worked by the employee over and above his contractual hours were part and parcel of his job, and it did not matter if the overtime was voluntary or otherwise. In this instance the Tribunal decided that the employee had been underpaid with regards to his holiday pay entitlement and the parties agreed to an out of court settlement.
This ruling has attracted interest as it may have implications for staff who are regularly required to work overtime. As Employer barrister Caspar Glyn succinctly put it, the decision in effect means that ‘Normal pay is normal pay and should be paid when you are on holiday’. So, on this basis Employers should take overtime into account when they calculate holiday pay.
However, there is a good deal of uncertainty regarding the detail contained in this Judgment, such as how normal pay is to be calculated and what happens if the overtime is compulsory. This is all likely to ensure that any prospective employee cases may be postponed until there is greater clarity, and Employers may defer any planned changes.
What does appear to be clear is that this ruling only applies to the 20 days’ holiday to which employees under EU law are entitled to, and not the 28 days holiday entitlement under current UK legislation. Further, the ruling has limited the extent to which claims can be back dated The Tribunal has indicated that if there has been more than a gap of three months between holidays employees will not be eligible to make a claim. In any event it seems likely that this recent decision may yet be appealed, so watch this space.
If you have any questions regarding this matter or any employment issues then please contact Daniel Darwish 01992 568033 or he can be emailed on firstname.lastname@example.org