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Overtime pay battle to continue indefinitely

EH SolicitorsBlogOvertime pay battle to continue indefinitely

Dec

12

Overtime pay battle to continue indefinitely

You may have heard in the news in the past few weeks that workers have won a ground-breaking case at the Employment Appeal Tribunal which means overtime is to be included in holiday pay.

This now means some people working overtime could claim for additional holiday pay, whilst as things currently stand, only basic pay counts when calculating holiday pay.

The tribunal also ruled that workers can make backdated claims, but this is just for a limited period.

However, in all the media furore over the ruling what has been overlooked is the ruling could be referred to the Court of Appeal, meaning a final decision may be years away.

This ruling has widespread implications for businesses where staff are required to do overtime as a regular part of their duties. Lawyers have said the tribunal did not make it clear on whether the ruling applied to workers doing voluntary overtime.

Just to clarify it from an employment law point of view normal pay is normal pay and that should be paid when you are on your holiday. Even though this was not spelt out in the ruling, this referred not just to compulsory overtime but also to any form of overtime that is worked on a regular basis.

Until now, some workers who are required to do overtime have been penalised for taking the time off they are entitled to and union chiefs have understandably welcomed the ruling.

It is a development likely to affect many, as of the estimated 31 million people who work in the United Kingdom, 5 million do voluntary or compulsory overtime.

 

The Government and business groups had argued that overtime should not be included in holiday pay calculations and were particularly concerned about a raft of back payments.

But backdated claims have been limited to no more than three months after the last incorrect payment.

The government have taken action already as on the day of the ruling, Business Secretary Vince Cable said he would be setting up a task force to see how it changes the employment landscape.

Business chiefs are concerned about the extra money they will have to pay out, with CBI director general saying the judgment must be challenged as it could kill some companies.

So it is abundantly clear this is a battle which will go on and on.

Sometimes we can all get carried away with the headline, but from a legal perspective there is still a big if about this altering overtime holiday pay significantly.

It’s still news very much that might happen rather than will happen.

At Ellis Hass and Co we shall watch with great interest. If you require any specific guidance on the ruling (on a totally free no obligation basis) please do not hesitate to call Paul Bownes at our office on 0121 709 1918.

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