Decision regarding holiday pay and non-guaranteed overtime.
A recent decision of the Employment Appeals Tribunal (EAT) means that holiday pay should include non-guaranteed overtime pay and other payments which are linked to the performance of a worker’s duties such as, some commission and certain supplements, enhancements and allowances.
The decision has retrospective effect but if there is a gap of more than 3 months between previous underpayments this would prevent any further claim in relation to historical pay.
If you are an employer you should act now to deal with the impact of the decision. Ensuring that you pay the correct holiday pay henceforth may well prevent any further back claims bearing in mind the “three month rule” referred to above.
It may still be open to employers to argue that genuinely voluntary overtime should not be included as the EAT did not decide on this point.
Please contact Mr Randall at Houghton Pigot Solicitors on 01942 241 288 if you require further advice regarding holiday pay arrangements in the light of this decision.