HOLDAY PAY UPDATE

04 Nov

What are the headlines from today’s decision in the Employment Appeal Tribunal in the case of Bear Scotland & Others?

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What are the headlines from today’s decision in the Employment Appeal Tribunal in the case of Bear Scotland & Others?

Article 7 of the Working Time Directive must be interpreted so that payments for overtime which employees are required to work, though which their employer is not obliged to offer as a minimum, are part of normal remuneration and must be included in the calculation of pay for holiday leave taken under regulation 13 of the Working Time Regulations 1998 (statutory holiday only – 4 weeks).

The claims could only go back three months as there was not a ‘series of deductions’ (unless there has been a deduction within the three months preceding the underpayment). This means that the level of back claims will be much lower than predicted (NB the alternative County Court route for holiday pay has not yet been tested).

What does this mean for employees? Some employees will now get a bit more spending money for their holidays with overtime pay being included in their holiday pay.

What does it mean for employers? Staff holidays are going to cost a bit more in the future but you are not facing back claims that could have bankrupted your business!

This case is likely to go to the Court of Appeal so make sure you check our blog regularly.

Have a look at Adrian’s blog in June this year on this subject where he explains how the ECJ approached the issue in the case of Lock.

http://12cpbarristers.co.uk/blog/cost-of-holidays-to-rise-for-employers

Link to transcript:
http://www.judiciary.gov.uk/wp-content/uploads/2014/11/bear-scotland.pdf


Peter D 

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