Overtime is now counted in the calculations of workers’ holiday pay—sort of. That was a ruling handed down by the Employment Appeals Tribunal (EAT) last week.
This means bosses must now include overtime into any calculations of workers’ 4.6 weeks’ holiday pay, but not the additional 1.6 weeks granted under Working Time Regulations.
But the EAT has given permission for its decision to be appealed, so things are still up in the air.
Technically employers should immediately start factoring overtime and commission into holiday pay. It doesn’t include any bonuses.
The judgement has created a limit on how far employees can backdate claims.
If there’s been a three-month gap between when a worker last took holiday and when they bring the claim, they won’t have a case.
Since the judgement is open to appeal all tribunal claims will be on hold.
Some of the press said that the payments could be backdated as far as 1998, when the Working Time Directive was first introduced, but that’s not the case.
The Tories scrambled a taskforce to limit the impact of the decision. It may be some time before the courts are finished with the issue.