15 April 2014

Calculation of holiday pay - do you have to include non-guaranteed overtime??

The EAT has now listed the cases of Bear Scotland Ltd v Fulton and Neal v Freightliner Ltd to be heard on 30 and 31 July 2014. The EAT's findings will determine whether payments in respect of non-guaranteed overtime have to be included in the calculation of holiday pay. This issue is deemed to be of such importance to employers that BIS has been granted leave to intervene in the proceedings.

In 2011 the ECJ found in British Airways Plc v Williams that all payments intrinsically linked to the performance of a contract must be included in holiday pay calculations. At first instance in the above two cases that was taken to include regular but not obligatory overtime.

Whether the EAT's decision proves "employer-friendly" or not, it will at least give some certainty in the increasingly complex matter of holiday pay.