In the commentary for this month’s newsletter I pointed out that employers should be bracing themselves for valuable backdated holiday claims pursuant to which employees could claim for the equivalent of overtime and commission payments going back over a number of years.
The story has now been picked up in the national press with features in Saturday’s Guardian and today’s Times (£). It has been suggested that backdating could go back as far as 16 years which could equate to claims worth hundreds of millions of pounds.
The first rulings from the Employment Appeal Tribunal are due tomorrow (4 November) and concern whether average overtime should be included in holiday pay calculations. Traditionally in the UK holiday payments have been calculated based on basic weekly pay.
A similar judgment is due next year concerning whether average commission payments should be included. As I mentioned in the newsletter claims companies are ready to launch campaigns similar to those used for PPI and it is thought that a ruling in favour of the claimants could put many employers out of business. The government has intervened in the proceedings to make clear its opposition to the claims.
UPDATE: Yesterday’s decision in the Employment Appeal Tribunal has had a mixed reception. Employees’ representatives are pleased that an overtime equivalent should be included in holiday pay while employers have latched on to the three months time limit for bringing claims. However, that is an aspect which is likely to come under further scrutiny in the Court of Appeal (as highlighted in the EAT judgment).
I’ll be providing a full analysis of the decision and its practical impact in this month’s newsletter.