Overtime will count towards holiday pay after workers win landmark case

4th November 2014

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Employees have won a landmark case for additional holiday pay to be awarded when they work overtime.

The case at the Employment Appeal Tribunal was brought by Britain’s largest union, Unite, against employers Amec and Hertel, as it said that workers were being short changed by over a half of their holiday pay.

The union said that today’s ruling means all UK employers need to include overtime when calculating holiday pay.

Unite said that 16 of its members, a mix of electricians, scaffolders and semi-skilled staff, worked on a project at the West Burton power station site in Nottinghamshire until it came to an end in 2012.

During that time they were consistently required to work overtime and received payments for travel time. Payments for that work were not included in holiday pay, meaning that the workers received considerably less pay when on holiday, compared to when they were working.

The appeal tribunal ruling follows an appeal by Amec and Hertel over an earlier Employment Tribunal decision in February which found in favour of the workers and recent decisions by the European Court that workers should receive normal pay when on holiday.

Howard Beckett, Unite executive director for legal, membership and affiliated services, said: “Up until now some workers who are required to do overtime have been penalised for taking the time off they are entitled to. This ruling not only secures justice for our members who were short changed, but means employers have got to get their house in order.

“Employers will now have to include overtime in calculating holiday pay, and those that don’t should be under no illusion that Unite will fight to ensure that our members receive their full entitlement.”

But employer groups say businesses could go to the wall. John Cridland, CBI Director-General, says: This is a real blow to UK businesses now facing the prospect of punitive costs potentially running into billions of pounds – and not all will survive, which could mean significant job losses.

“These cases are creating major uncertainty for businesses and impacting on investment and resourcing decisions. This judgment must be challenged. We need the UK Government to step up its defence of the current UK law, and use its powers to limit any retrospective liability that firms may face.”

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