On 1 August 2014, the EAT reserved its judgment in three important cases on the calculation of holiday pay under the Working Time Regulations (WTR), which have significant implications for employers, as the central issue is whether or not non-guaranteed (non-contractual) overtime should be included in holiday pay calculations.
In Bear Scotland Ltd v Fulton and another (highlighted in our ‘Cases to watch out for’ earlier this year), Hertel (UK) Ltd v Wood and others and Amec Group Ltd v Law and others, the claimants argued in employment tribunals that their employers should have included regular, but non-contractual, overtime in their holiday pay and their claims were upheld. In the co-joined appeals, the employers argued that the employment tribunal decisions run contrary to UK case law that payment for non-contractual overtime does not have to be included in holiday pay. It is understood that the Secretary of State for Business Innovation and Skills intervened in the case because of the implications, both economically and due to concerns about just how far UK courts should go to interpret UK law to be compatible with ECJ case law on holiday pay calculations.
If the EAT rejects the appeal on the central issue, and there is no appeal, or further appeals are unsuccessful, there are two practical implications: (i) employers would be required to include non-contractual overtime in holiday pay; and (ii) the Government would have to amend the WTR because it will have been judged not to have implemented the Working Time Directive properly. So ‘watch this space’, because the impact of these cases could be far reaching.
Content Note
The aim is to provide summary information and comment on the subject areas covered. In particular, where employment tribunal and appellate court cases are reported, the information does not set out full details of all the facts, the legal arguments presented by the parties and the judgments made in every aspect of the case. Click on the links provided to access full details. If no link is provided contact us for further information. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, SM&B cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
This provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, we cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
