Bear Scotland v Fulton & others
The Employment Appeal Tribunal (“EAT”) handed down an important decision involving the calculation of holiday pay a couple of weeks ago. The case included a claim of unlawful deduction of wages for increased holiday pay due to working non-guaranteed compulsory overtime. The key points were as follows:-
- workers are entitled to be paid a sum of money to reflect normal non-guaranteed compulsory overtime as part of their annual leave payments;
- this applies only to the basic 4 weeks' leave granted under the Working Time Directive, not the additional 1.6 weeks under the Working Time Regulations;
- 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;
- travel time
- payments, which exceed expenses incurred and so amount to additional taxable remuneration, should also be reflected when calculating holiday pay.
The EAT gave permission to appeal to the Court of Appeal (stating that the third point, concerning how far back claims can go, was the most significant point for the Court of Appeal to consider).
In Practice
The main decision in this case is not a surprise following others involving commission payments and pilot allowances. It is almost certain that this case will be appealed to the Court of Appeal and we have therefore not heard the last word on this issue. One aspect that has not been clarified is whether payment should be made as part of holiday pay for regular voluntary overtime. Employment Partner Kate Fretten says, "Our view is that, since the whole reasoning behind this case is to put a worker at no disadvantage in financial terms when they take a holiday, voluntary overtime that is regular and has come to be relied on by a worker is likely to be included in the calculation of holiday pay."
At Frettens, all of our solicitors offer a free initial meeting or chat on the phone to answer your questions. If this article raises issues for you or your business, please call us on 01202 499255 and Kate or Paul will be happy to discuss it with you.
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