Are you aware of the updated holiday pay guidelines?

In the run up to Christmas, Essex-based solicitors Palmers is reminding people that ACAS has updated its guidance following a ruling last month on holiday pay.

Lara Murray, an Associate Solicitor at the firm said: “As well as current legislation, a number of recent court judgments should be considered when calculating holiday pay.”

As Lara points out, guaranteed overtime is where the employer is obliged by the contract to offer and pay for agreed overtime. Following a judgment in 2004, guaranteed overtime must be included within the calculation of holiday pay. However, non-guaranteed overtime is where there is no obligation by the employer to offer overtime but if they do then the worker is obliged by the contract to work overtime. On 4 November 2014, the Employment Appeal Tribunal handed down judgment in the case of Bear Scotland versus Fulton which covers how holiday pay should be calculated when non-guaranteed overtime is worked.

Last month’s judgment clarified that workers should have their normal non-guaranteed overtime taken into account when they are being paid annual leave. Also, anybody making a claim must have had an underpayment for holiday pay that has taken place within three months of lodging an employment tribunal claim.

Furthermore, if a claim involves a series of underpayments, any claims for the earlier underpayments will fail if there has been a break of more than three months between those underpayments. Finally, only the four weeks’ annual leave entitlement under the original Working Time Directive apply to this judgment, rather than the full 5.6 weeks’ leave provided by the regulations that operate in Great Britain.

If you would like more advice about this or any other employment issue, please contact us.