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Holiday Pay - Update

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Hot on the heels of yesterday's announcement that holiday pay should include overtime payments, further details have emerged of the Employment Appeal Tribunal's ruling.

The key points are:

  • Workers are entitled to be paid a sum of money to reflect normal non-guaranteed overtime as part of their annual leave payments (holiday pay).
  • Claims for holiday pay arrears will not be allowed if there has been a break of more than three months between successive underpayments.
  • The ruling only applies to the four weeks' leave granted under the Working Time Directive.
  • Payments for travel time which exceed expenses incurred should also be reflected in the holiday pay calculations.

As mentioned yesterday the decision is subject to a possible appeal, and we will let you know if and when this is the case.

Government reaction

Soon after the announcement, Business Secretary Vince Cable announced that he would establish a taskforce to assess the possible impact of the ruling.