Today we await the decision from the EAT (Employment Appeal Tribunal) on whether (voluntary) overtime pay should be included in holiday pay. This has been an emerging area over many months and to date remains unclear. We may have more clarification on the application of the law, although in view of the implication of this ruling and it’s impact on UK business, further appeals and debate are likely.
A spokesperson for the Department of Business, Innovations and Skills says, “We do not believe voluntary overtime should be included in holiday pay and are concerned about the potential impact on employers.”
This issue remains extremely complex, with a number of legal and practical issues on the proportion of holiday entitlement that may attract a more generous calculation and the period on which an average should be based.
Whilst ever the issue remains ‘grey’ it is difficult to give definitive advice. However, a good first step would be to understand your exposure to such a situation by working out the impact of including ALL overtime in holiday calculation, rather than a standard basic day/week.
This morning’s judgement, expected at 10:30 GMT, can be appealed to the Court of Appeal, or it could be referred to EU courts in Luxembourg for clarification on how European law should be interpreted.
Call us on 01302 341 344 and ask for our Employment Team if you would like to discuss this issue.
By Jodi Cooling Group Operations Director