Tribunal rules overtime should count in holiday pay

Posted By: James

Wednesday 5th November 2014

Around 5m people could be eligible to collect backdated holiday pay, after the Employment Appeal Tribunal ruled that employers must include overtime when calculating holiday pay. Unite brought cases against Amec and Hertel; the union said the employees consistently worked overtime, but that was not included in holiday pay, meaning they received “considerably less” pay when on holiday compared to when they were working. Linklaters partner Jean Lovett described the financial implications for many firms as “significant”, while Mike Cherry, policy chairman of the FSB, said: “The government must bring in emergency legislation to prevent the backdated claims. [If they don’t act] hundreds of businesses will shut down and that will lead to thousands of employees being laid off”. Adam Lambert, of Clyde & Co, added: "What may look like a victory for workers could lead to employers having to recover the pay through other means".

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