First published on Thursday, Aug 13, 2020
Last updated on Tuesday, Jun 18, 2019
On the 14th June 2019, the Court of Appeal made an important ruling that could mean you have to increase your staff’s holiday pay. Here’s everything you need to know…
The case that changed holiday pay rules
In 2017, a group of ambulance drivers took their employer to a tribunal over holiday pay.
The drivers regularly worked paid voluntary overtime but this didn’t count towards their holiday pay. The Employment Tribunal agreed that it should.
And last week, the Court of Appeal sided with the drivers, too. It said that any voluntary overtime that’s “sufficiently regular and settled” should count towards holiday pay.
If the employer appeals again, there’s still a chance that the Supreme Court could overturn this decision. But with the Court of Appeal backing the drivers, it’s unlikely.
What does this mean for your business?
If you regularly dish out voluntary overtime to your staff, then you might need to increase their holiday pay.
But you only need to include voluntary overtime in holiday pay for the first four weeks of annual leave. After that, you can pay staff their normal basic rate.
It’s up to you to define what counts as regular voluntary overtime. So you might decide that it doesn’t apply to your people’s hours. But think carefully about this decision.
Because if an employee complains to an employment tribunal and it finds that you’ve underpaid your staff, you could be forced to back-pay underpaid holiday for the previous two years.
Don’t let this new ruling trip you up
You’re not a holiday pay expert. But our people are.
Call BrightAdvice and speak to our qualified HR specialists today. They’ll give you accurate advice on whether you need to pay your staff more in the wake of this new ruling.
Plus, they’ll guide you through any corrections you need to make to staff contracts to cover new holiday pay rules.
Call 0800 783 2806 to find out more.