MSE News: Overtime should count towards holiday pay, rules tribunal 4 November 2014 at 12:30PM in Employment, jobseeking & training 63 replies 7.9K views

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Overtime worked should be taken into account when holiday pay is calculated, the Employment Appeal Tribunal has ruled ...

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Overtime should count towards holiday pay, rules tribunal




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Monkeyballs

Sorry if I'm being thick but in the past when I have done overtime it was paid at a higher rate and was seen as being a bit of a 'perk' since it was only usually offered to long standing employees (or at least they were given first refusal) and when I was on holiday I accept that it is my choice to not be at work and thus don't have the option of doing overtime?

Have I missed the point here? LOL, surely doing this is going to mean the option for overtime is reduced due to the increased cost meaning people may be further out of pocket as they won't get any overtime as opposed to missing out for a few weeks each year?

Or, is this saying that I should accrue additional holiday entitlement for the additional hours worked? Surely that's accommodated in the increased pay?

MB

agrinnall

"However, many companies have warned that they face a multi-billion pound bill to cover backdated claims, which could put some out of business as a result of today's decision."

I've just listened to a lawyer say that the ET ruled that it could only be backdated for 3 months, so it seems very unlikely that the retrospective additional holiday payments will amount to anywhere near multi-billion pounds.

brewerdave

MANY years ago in the major UK employer that I then worked for, holiday pay was calculated as "average earnings" for the hourly/weekly paid staff -this included overtime,shift rate,night rate etc .HOWEVER, in the early 90s the hourly paid staff were brought in line with salaried staff and had a one off buyout of their entitlement which in some cases was a multi thousand £ payout.
I presume that those employees won't have any entitlement?
Further thought -they were talking about backpay to 1998 -how many employers/employees hold records going back 16 years?Very very few I suspect.
Also what about companies that have gone bust,been taken over, been split up and sold off in bits?? Its a recipe for a lot of lawyers to make a lot of money -and for some companies it might be the final straw!!

EDIT -Just seen agrinnall's post -makes my thoughts irrelevant if correct!:o

[Deleted User]

I think I may be a prime example of the point here.

I used to work for a company, 37.5 hours every week, but on a 30-hour contract because "we don't do 37.5 hour contracts". The remaining 7.5 hours every week were paid as overtime.

However, when I took a week of holiday, I was paid 30 hours wage that week, rather than 37.5 - so it essentially cost me £50 or so to take a week off.

aldredd

It's in interesting ruling - and needs careful consideration.

On the one side, whilst I can see it being billed as 'a victory for workers' - there's a good chance that companies will simply limit the supply of overtime (they'll pretty much have to, to a point, to cover the additional cost associated with it).

On the other hand, I can see how the current system could be abused by, as @billbennettt said, companies limiting contracted hours, and topping up with overtime.

What I think is needed really, is an overhaul of contracted hours - and not just 'zero hour' contracts. But rather something that says if you work a set number of hours x number of weeks (6?), then that is what your contract moves to. (There is already some employment law around this, but it needs firming up)

lulu_92

At my old work I was contracted to less hours than I actually worked because overtime was always needed.

In 4 years I never knew what my basic pay was as I always did overtime yet wasn't paid more for overtime shifts (apart from when they wanted to me work a Saturday night and I asked for double time )

For a long period of time I was working 6 or 7 days a week but only got holidays for 25 days a year

mije1983

aldredd wrote: »

there's a good chance that companies will simply limit the supply of overtime (they'll pretty much have to, to a point, to cover the additional cost associated with it).

^ This is what I think will happen. If I was doing 5 hours overtime a week for most of the year, I would prefer to just lose it for 4/5 weeks of holiday, rather than lose it completely.

This could run for a long time yet before it affects workers though, as I can't imagine it will go without appeal, and will then be tied up in the legal system before any final decision is handed down.

brewerdave

lulu_92 wrote: »

At my old work I was contracted to less hours than I actually worked because overtime was always needed.

In 4 years I never knew what my basic pay was as I always did overtime yet wasn't paid more for overtime shifts (apart from when they wanted to me work a Saturday night and I asked for double time )

For a long period of time I was working 6 or 7 days a week but only got holidays for 28 days a year

...but it wouldn't change the number of days holiday entitlement -just the rate of pay that you would get when away.

RedDwarf82

aldredd wrote: »

there's a good chance that companies will simply limit the supply of overtime

They need the work done, don't they?

lulu_92

brewerdave wrote: »

...but it wouldn't change the number of days holiday entitlement -just the rate of pay that you would get when away.

I worded it wrong, I meant to write 25 - stupid number pad.

When I worked 4 days a week I got 20 days holiday.
When I worked 5 days I got 25 days holiday. I would still get 25 days holiday for working 6 or 7 days a week.

Our holidays were made up of hours so the 20/25 days were made up of how many hours you worked in a week and multiplied by 5. So when I first started on 2 days a week (19 hours) I got 19x5 hours holiday. For the months I was doing 60 hours or so I was still getting my basic 30 hours x 5.