A number of linked cases referred to the Employment Appeal Tribunal (EAT) on the issue of whether holiday pay should include overtime payments, have been decided today.
The EAT has decided that where regular non-guaranteed overtime is worked, it should be treated as normal remuneration and should be included in calculations for holiday pay. However this provision only applies to the first four weeks (inclusive of bank holidays) of statutory holiday.
Back pay can be claimed but only if the ‘deduction’ in respect of holiday pay was less than three months ago – earlier holiday payments can form part of the claim only insofar as there is not a gap of more than three months between them. However, the EAT indicated that this finding was most susceptible to an appeal to the Court of Appeal. A government task force has promptly been announced by Vince Cable to examine and possibly limit the impact of this court ruling.
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