People that work voluntary overtime may claim for additional holiday pay in the future following a ground breaking ruling by the Employment Appeal Tribunal. The ruling has significant implications for many companies both large and small whose employees are required to do overtime as a regular part of their job.
Currently, only basic pay counts when calculating holiday, however the ruling could also lead to backdated claims being made during a limited period. While the Employment Appeal Tribunal refused to grant a reference to the Court of Justice of the European Union, permission was granted to appeal to the Court of Appeal, so a final decision may well be years away.
Four key points from the ruling are:
Employees are to be entitled to a paid sum of money reflecting their normal non-guaranteed overtime which forms part of their annual leave payments.
The above only applies to the basic four weeks leave under the Working Time Directive and not the additional 1.6 weeks leave under regulation 13A of the Working Time Regulations.
Subject to a reasonable practicability test, employees that claim for holiday pay arrears will be out of time if there is a more than a three month break between successive underpayments.
When calculating holiday, travel time payments which exceed expenses incurred and amounts to additional taxable remuneration, should also be reflected.