Overtime should count
towards the calculation of holiday
In the landmark case
of Bear Scotland Ltd v Fulton (and others
conjoined) case, the Employment Appeals Tribunal today passed its Judgment.
The primary finding
affecting workers and employers being that overtime should be taken into
account when calculating a worker’s holiday pay.
This means therefore
that where a worker engages in overtime for a sufficient period, their holiday
pay should include any overtime, as well as commission, thereby reflecting
their normal remuneration.
Under the Working
Time Regulations workers are entitled to 5.6 weeks holiday which can include
public holidays. The finding that overtime should count towards holiday
entitlement only applies to the basic 4 weeks leave and not the additional 1.6
weeks.
It will come of some
relief to employers that the EAT concluded however that where there is a break
of more than 3 months between any holiday pay claims, an Employment Tribunal
will not have jurisdiction to hear the earlier claims. This will serve to
restrict so much as possible, a worker’s ability to bring valuable claims for
underpaid holiday pay.
This is by no means
the end of the matter. Vince Cable has already confirmed that he is setting up
a taskforce to assess the possible impact of the ruling on holiday pay. The EAT
have also already granted permission for this decision to be appealed and be
dealt with by the Court of Appeal, the outcome of which however will
undoubtedly be some time away.
In the meantime it
would be prudent for employers to take stock of their current working practices
and potential liabilities as a result of this matter in the anticipation of
potential holiday pay claims.
If you feel this is a matter which may affect you, contact our Employment Law team on 01978 291000 for Wrexham, 01244 312166 for Chester or 01492 641222 for Llanrwst or visit www.allingtonhughes.co.uk
