There has been a decision made by the European Appeal Tribunal Case Law about holiday pay and voluntary overtime that should make all employers sit up and listen. The law states contractual overtime, which is regular and recurring must be paid as holiday pay. This is for the first 20 days of an employee’s holiday entitlement and pay. However, the EAT states employees who voluntarily do regular and recurring overtime should also be. This rule only applies when they take the first 20 days of their annual holiday leave.
Some legal eagles are recommending to ‘sit tight’ and wait for the EAT to decide what it considers to be “regular” and “recurring” voluntary overtime. But the Barrister representing the employees of the claim stated that these workers had worked 2 – 4 hours overtime every week. They also performed on call duties once every four weeks for most of their employment. The judge agreed the overtime was regular and recurring. He said that the workers relied on the extra money as part of their ‘normal pay’. The employee should not lose money in their pay just because they take a holiday. Even if this regular, voluntary overtime is not even mentioned in their contracts of employment.
European Appeal Tribunal Case Law About Holiday Pay and Voluntary Overtime – What This Means.
We do not think you will suddenly have to make back pay from previous years extra holiday pay. We do think this new ruling may affect your current year’s holiday pay. This is only for employees who have worked “regular” or “recurring” voluntary overtime. There is also the issue of the new ruling around Tribunal fees. The government has withdrawn tribunal fees. Therefore, you could potentially be leaving yourself wide open to a Tribunal claim.
So, if you regularly dish out overtime to members of staff and you are unsure whether to pay extra in their first 20 days holiday pay, give us a call at Metis HR to discuss European Appeal Tribunal Case Law About Holiday Pay and Voluntary Overtime.
Metis HR is a professional HR Consultancy based in the North West of England supporting clients across the country. We specialise in providing outsourced HR services to small and medium-sized businesses. Call us now on 01706 565332 to discuss how we may help you.
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