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Important Decisions on Holiday Pay.

Date: 04/11/2014 | Employment & HR

The Employment Appeal Tribunal has this morning handed down judgement in Bear Scotland v Fulton (and conjoined cases).

The key points to note coming from these cases are:

  1. Workers are entitled to be paid a sum of money to reflect normal non-guaranteed overtime as part of their annual leave payments. 
  2. The ruling applies only to the basic four weeks leave granted under the Working Time Regulations and not the additional 1.6 weeks also available to workers in the UK.
  3. Claims for arrears of holiday pay would be out of time if there has been a break of more than three months between successive underpayments.
  4. Travel time payments which exceed expenses incurred and so amount to additional taxable remuneration should also be reflected when calculating holiday pay. 

Leave was given to appeal this judgement and we await confirmation of whether any appeal will proceed. If so it is likely that the issue of how far back holiday pay claims can go will be a key issue for consideration by the Court of Appeal.  

Following this morning’s report on holiday pay business secretary Vince Cable has announced he is setting up a new task force to assess the impact of this ruling.  Although the press release issued by the Government does use neutral language about “assessing the possible impact” of the holiday pay ruling a tweet issued from the BIS press office did mention that the Government’s task force would be looking at ways that it could assist businesses in limiting the impact of the holiday pay ruling.

If you would like any more information about any of the cases listed and the impact that these may have on your business, please do not hesitate to contact Davidson Chalmers’ Employment Team, who will be happy to provide their advice and assistance.

The matter in this publication is based on our current understanding of the law.  The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.

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