MSE News: Overtime should count towards holiday pay, rules tribunal

WLM21

This seems good news.

My wife used to work a minimum of 48 hours a week and sometimes 60 or even 72 hours but when it came to her holiday pay, it was limited to 36.

I remember her colleague at the time laughing a this .. neither of them had ever worked for only 36 hours, so they were a bit puzzled. They were simply told "That was the rule, so tough !!".

I'm not sure if she would be entitled now to the extra and anyway I am 99% sure she wouldn't bother applying, as she has changed jobs since.

PlymouthMaid

It would seem strange to get enhanced pay for overtime as well as accruing time off - surely it is one or the other?

specialboy

PlymouthMaid wrote: »

It would seem strange to get enhanced pay for overtime as well as accruing time off - surely it is one or the other?

A lot of people don't get enhanced pay for overtime until they have done at least full time hours, eg if someone works 30 hrs then any overtime upto 35/37/40 hrs or whatever would be aid at normal rate.

trollopscarletwoman

Hello.

My wife is on a seasonal contract for around 10 months of the year.

I would call it affectively a zero hours contract (those words are never used) because there are no guaranteed hours-only a minimum of 0 during any 1 week.

However, she does get lots of hours often 60-70 per week. Basically as and when required. Therefore there is no basic hours to set overtime on. Any so called hours only attract minimum wage anyway. There is no additional pay for weekends or bank holidays but she accepts that.

She gets a lump sum pay off of around £1000 next month then has 2 months off. I do extra then.

Is there a set formula in law as to how this holiday entitlement is worked out? it all seems very complicated to me. I believe she gets the maximum holiday pay but works many hours in excess to that.

If I'm reading this ruling correctly then she'll be up for more. But I'm not planning our finances on it.

Monkeyballs

Won't it be cheaper for employers to just restrict overtime and get another member of staff, even if it is zero hours contract?

Sure that employee will accrue holiday pay but they are paid for that time at single rate and not time and a half, or double or more?

I may still be missing the point but in my head I'm seeing loyal long term employees losing out as employers opt for another member of staff rather than paying a higher rate to their original employees?

MB

unitedwestand

Ruling is absolutely nuts, not only are small businesses expected to pay staff when they're not working (holiday pay) but pay them overtime whilst they're sunbathing on the beach.

Many small businesses that narrowly survived the recession are still struggling.

The government are already forcing small businesses to pay private pensions after having raped the public ones.

This is has the potential to add 3/5% on to the payroll at a time when companies are already trying to keep employees wages at least inline with inflation while trying to compete on a global scale with the likes of China & India.

Small businesses account for 99.9% of all private sector businesses in the UK & many are under pressure to cut costs of products &services & todays bonkers ruling wont help.

elsien

PlymouthMaid wrote: »

It would seem strange to get enhanced pay for overtime as well as accruing time off - surely it is one or the other?

In my last place, not only was there no enhanced pay for overtime but as a manager if I did overtime to cover a support worker if we couldn't get cover and couldn't take it as toil (which as we were permanently short staffed was not often possible) I got paid it at the lower pay rate.
I think this ruling is a good thing for staff who are contracted on part time hours but do full time plus week in and week out. It's not going to cost the company any more than employing another body to cover the shortfall.

unitedwestand

Monkeyballs wrote: »

Won't it be cheaper for employers to just restrict overtime and get another member of staff, even if it is zero hours contract?

Cheaper maybe, practical not really. By its nature, most companies will ask staff to work overtime to fulfil short notice orders or client requests. The very nature of zero hour contracts means that either party, employer or employee does not need to fulfill specific hours so would be unfeasible unless you had a large pool of fully trained & qualified personnel sitting in the wings on zero hour contracts you could ring round to ask if they'd like to work a couple of specific hours. It would be better just to ask the client to wait & offer a financial incentive (discount to do so) where it's practical. So what you'll find is employers cutting back heavily on overtime & the average annual take home pay of employees will actually fall.

unitedwestand

trollopscarletwoman wrote: »

Is there a set formula in law as to how this holiday entitlement is worked out? it all seems very complicated to me. I believe she gets the maximum holiday pay but works many hours in excess to that.
.

https://www.gov.uk/calculate-your-holiday-entitlement

amiehall

A lot of employers do actually do this already, I'm shocked that people think this is a massive burden. For example, in a previous job I've been on a 25 hour contract and worked over 40 hours every week. When I went on holiday, I would be paid an average of my hours over the previous 12 weeks as holiday pay. I've had that sort of system in more than one job and it seems 100% fair to me.

I wouldn't approve of long backdating and it does just mean that employers will have to consider these costs when setting overtime rates. But it doesn't create any incentives to hire additional staff instead of giving overtime, not sure why people keep saying that...