Workers have won a landmark case at the Employment Appeal Tribunal (EAT) to include regular overtime in holiday pay. Under EU law, workers are entitled to 4 weeks holiday pay per year, however there are no details on how this should be calculated.
The UK government has until now interpreted the EU ‘Working Time Directive’ as holiday pay should be at an employee’s basic rate of pay – meaning any additional payments for regular overtime aren’t included. Most employers have therefore not included regular overtime in their calculation of holiday pay.
The tribunal ruling suggests that the government and UK companies have been interpreting the EU directive wrongly. The Employment Appeal Tribunal ruled on 3 test cases against:
- Amec (engineering company)
- Hertel (industrial services firm)
- Bear Scotland (maintenance company)
The staff at these firms indicated they 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.
Overtime Holiday Pay Reaction By The FSB
Federation Of Small Business (FSB) Regional Chair Nicky Goringe Larkin speaks to Phil Kennedy on BBC Radio Berkshire over impact to small