Landmark ruling sets precedent on holiday pay calculations

By Linder Myers

06 Nov 2014

Businesses who operate with workers on a regular overtime and commission basis should take heed of a landmark decision by the Employment Appeal Tribunal which ruled that UK regulations were out of line with EU law on 4th November 2014.

The tribunal involved employees from engineering firm Amec, industrial services business Hertel and roads maintenance company Bear Scotland and ruled that workers paid regular overtime and commission rates should receive more than their basic rate of pay during annual leave.

Alan Lewis, head of employment at Linder Myers Solicitors in Lancashire comments: “The decision is significant and means that businesses will have to start taking into account employees’ overall remuneration when calculating holiday pay and not just pay workers their basic rate during annual leave in line with the UKs Working Time Regulations Act 1998.

"The case will have significant ramifications to those employees whose pay is significantly enhanced by commission and bonuses, as well as those employers that rely upon their employees working regular overtime. The decision also has a retrospective effect which has caused great anxiety amongst business owners.

“Many businesses are worried that they could face significant claims for backdated holiday pay, which the CBI has estimated could run into “billions of pounds”. The Government has set up a task force to address the significant implications of the case and the exposure businesses now face to costly tribunal claims.”

The ruling only applies to the minimum four weeks’ holiday required by EU law and not to the additional 1.6 weeks provided by UK regulations or any discretionary holidays. Employers may also avoid costly retrospective claims, stemming back many months or even years, if they can establish a gap of more than 3 months between successive underpayments of holiday pay. The decision is likely to be appealed to the Court of Appeal.

Enjoyed this? Read more from Linder Myers

Latest news

1

Rospen shares global reach and industry expertise with MP Grant McGeever and Sarah Smith MP

Rospen shares global reach and industry expertise with MP

23 Dec 2024

2

The Flow Group acquires Blackburn based Modern Bookbinders in strategic asset purchase The Flow Group's Richard, Mick and Helen

The Flow Group acquires Blackburn based Modern Bookbinders in strategic asset purchase

23 Dec 2024

3

fulfilmentcrowd reports record-breaking performance LeeThompsonfulfilmentcrowd

fulfilmentcrowd reports record-breaking performance

20 Dec 2024

4

Record year for Grant Thornton Northern deals team The team

Record year for Grant Thornton Northern deals team

20 Dec 2024

5

New partner among family team hires as Brabners strengthens personal offer Cara Nuttall Chris Fairhurst And Hannah Saxe

New partner among family team hires as Brabners strengthens personal offer

20 Dec 2024

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
The Lancashire Festival of Business
FOB 315
Exhibitions
30 Jan 2025

The Lancashire Festival of Business

Impact Conferencing, Burnley, BB12 6QP

09:30 - 16:00

Skills Bootcamp in Procurement - Cohort 3
Blue-Modern-Land-Travel-Youtube-Thumbnail-2-1024x576.png.png
LBV Hub Awards
14 Jan 2025 - 18 Mar 2025

Skills Bootcamp in Procurement - Cohort 3

Community & Business Partners CIC, Blackburn, BB2 3UA

09:30 - 13:00

Preston Tech Connection - January Meet-Up
Nov Preston Tech Connection event banner-4.png.png
LBV Hub Networking
15 Jan 2025 - 15 Jan 2025

Preston Tech Connection - January Meet-Up

Society1 Coworking Space, Preston, PR1 3LT

18:00 - 19:30

R.I.S.E. and Shine
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
16 Jan 2025 - 16 Jan 2025

R.I.S.E. and Shine

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

08:45 - 11:00

The Business Network Central & East Lancashire
LBV Hub Networking
16 Jan 2025 - 16 Jan 2025

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

LBV120 Magazine Launch Event
DSC9389
Networking
17 Jan 2025

LBV120 Magazine Launch Event

Lancastrian Suite, Town Hall, Chorley, PR7 1DP

08:30 - 10:30

Red Rose Awards 2025
Red Rose Awards 2025
Awards
13 Mar 2025

Red Rose Awards 2025

Winter Gardens Blackpool

18:00 - 11:59

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV118 Online Graphic
Subscribe now

Weekly news bulletin