As predicted, the Employment Appeal Tribunal has ruled that overtime should now be included when calculated holiday pay.
In June we published a blog asking the question ‘What constitutes holiday pay?’. That blog highlighted that commission payments were to be included in the calculations. This followed an ECJ decision. If you heeded our advice in that blog, then you already know how that new judgement affects your business.
This new ruling means that when calculating holiday pay for an employee, the pay must be based on basic pay, commission payments, overtime payments and possibly even travel time. These judgements form case law and hence apply immediately.
The ruling will likely be appealed but this will take time.
Today’s judgement still leaves it unclear as to the retrospective time scale that will be applied.
Our July advice still stands: include these extra payments in your holiday calculations now.
As soon as further data is available regarding the ruling we will update this blog.
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