Workers have today won a groundbreaking case in the Employment Appeal Tribunal to include overtime in holiday pay. Currently, only basic pay counts when calculating holiday pay.
This decision means that all people working voluntary overtime could claim additional holiday pay. Currently, there are around 5 million workers in the UK who work overtime and some estimates suggest that if claims can be backdated, the cost to employers could amount to billions.
The law on holiday pay has been in flux for some time, so today’s decision provides some clarity. However, given the significant potential financial implications for employers, the decision may well be appealed, so we may well not have heard the last on the matter. In fact, a final decision may be years away.
Meanwhile, many employers may well look at reducing the availability of overtime as a preventative measure.
For more information, call Consensus Employment Law on 01202 739249.