Workplace Rights: Holiday pay claims

Important cases are pending before tribunals and courts concerning workers' statutory holiday pay. In particular, should it be calculated to include overtime and commission?

by Michael Burd and James Davies
Last Updated: 04 Nov 2014

The UK's Working Time Regulations allow employers to equate holiday pay to basic salary only but European Court rulings suggest entitlement should be based on 'normal remuneration', including at least some supplemental payments.

A change to the way holiday pay is worked out could have huge financial implications for businesses. Not only would staffing costs rise, but employers could face claims for previously underpaid periods of annual leave.

The position is unlikely to be resolved quickly, as the relevant cases could be appealed to the higher courts and might even be referred to Europe. Meanwhile, publicity about the issue is increasing and no win, no fee firms are showing interest.

While some employers have already been negotiating about settling holiday pay claims, most are adopting a 'wait and see' approach. Businesses would be well advised at least to undertake an audit of their current arrangements to establish any potential financial exposure.

Michael Burd and James Davies, Lewis Silkin LLP solicitors, email: employment@lewissilkin.com

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Which values matter most in a crisis?

Have your say on how coronavirus is changing your culture.

C-Suite parents share working at home tips

For many people, the home office is now also a home school.

How to manage remote teams (without becoming a Zoom pest)

Briefing: Former Waitrose boss Mark Price says managers will need to think about how they’re...

Could coronavirus lead to gender equality?

Opinion: Enforced home-working and home-schooling could change the lives of working women, and the business...

Mike Ashley: Does it matter if the public hates you right now?

The Sports Direct founder’s response to the COVID-19 pandemic has drawn criticism, but in the...