Employment Appeal Tribunal rule on holiday pay

Employment Appeal Tribunal rule on holiday pay

The Employment Appeal Tribunal has, this morning, given judgment in Bear Scotland v Fulton (and other related cases).

The key  issue related to whether or not overtime pay should be taken into account for the purpose of calculating holiday pay . The full judgment runs to over 90 pages, but the key points can be summarised as follows:

  1. All employees  are entitled to be paid a sum of money to reflect normal “non-guaranteed” overtime as part of their annual leave/holiday payments.
  2. This  applies only to the basic 4 weeks' leave granted under the European  Working Time Directive, not the additional 1.6 weeks (8 days ) under Regulation 13A of the Working Time Regulations which is the UK legislation to implement the European law.
  3. Claims for arrears of holiday pay will be out of time if there has been a break of more than three months between successive underpayments and this is in keeping with the general 3 month time limit for most employment claims.
  4. Travel time payments, which exceed expenses incurred and so amount to additional pay, should also be reflected when calculating holiday pay.

The position may yet change as it is expected that there will be an appeal especially in relation to point 3 above, which is perhaps the most significant point . As one would expect , opinion is divided with business leaders criticising the decision whilst those championing the rights of workers, especially the low paid, have welcomed the decision and clarification .