Following a recent ruling in the Employment Appeal Tribunal a worker’s holiday pay must now include the amount that s/he would ordinarily earn from working overtime, commission or other allowances or payments. We spoke to Raquel Twigger an employment law specialist at Stephen Rimmer LLP to shed some light on this issue for employers in the area. Below is a description of what has been decided and what you will need to do going forward.
The good news is that it has been decided that to try and stay a mass of back pay claims against British businesses, the law courts have ruled that workers may only claim for a series of deductions (a series of holiday periods where overtime was not paid) if they are NOT separated by more than three months.
For the purposes of calculating annual leave, employers should base a weeks pay on an average of the worker’s earnings over the 12-week reference period that is already used for other workers whose normal pay varies from week to week.
A Government task force has been set up to look at how it can limit the impact of the decision on business although it is considered there is a limited amount of help it will be able to provide.
Raquel will be happy to speak to businesses owners about this and you can call her on 01323 644222 and or you can email her at firstname.lastname@example.org we will keep you posted on any further developments and announcements from the Government task force.