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

bugslet

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?

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

I think it really depends on the job. If you can plan work, either on a weekly basis or seasonally, then maybe it makes more sense to get another employee.

In my companys case, it wouldn't work. Partially because we cannot plan how busy we are the next day often ( flipping customers!), but as a lot of our work is international, my lads are out for days, sometimes weeks at a time. They are guaranteed 12 hours whilst they are abroad ( 8 hours basic + 4 at overtime rate), even if they are on weekly rest or as sometimes happens, they have to stand for a day somewhere in between jobs.

As I said, if it's happening, it makes no odds. I have to do it, my competitors have to do it and we just add it to the invoice and the consumer ends up paying it.

brewerdave

Going forward, if this "ruling" stands, then I can see a lot of Companies employing temps. via agencies to minimise overtime amongst regular staff - the agency will then be responsible for holiday pay as I understand it, and will be unable to claw the extra cost back as it is a competitive market -this will drive agency wages down to minimum wage level (if they aren't already there)

amiehall

A lot of misinformation flying around. Zero hours workers and agency temps already are paid holiday for every single hour worked. Getting them to work instead isn't a cost saving.

brewerdave

amiehall wrote: »

A lot of misinformation flying around. Zero hours workers and agency temps already are paid holiday for every single hour worked. Getting them to work instead isn't a cost saving.

.....But as I understand it, the employing co. don't pay the agency temp. holiday pay -the agency do (or certainly did when I was last involved) -and the way they can recover the costs is by increasing the hourly charge they make to the employer -and in a competitive market they struggle to achieve the full cost.
From the employing cos. point of view they have even more reasons to keep the overtime done by direct employees down, they have to pay for it at the time then again when they pay holiday pay following the ruling.

An earlier post suggested that enhanced holiday pay was the norm - but in my experience many companies got rid of it 15-20 years ago by negotiation - as part of a collective bargaining deal that usually involved some form of buyout of the previous arrangements, putting hourly paid staff on the same footing as salaried staff. This was carried out as part of a realignment of practices to comply with the WTD.

bigbri22

i work for network rail as a signaller.due to their on going restructuring process where most signal boxes are due to be closed , they have left a lot of vacancies unfilled over the last few years.i am contracted to work 35 hours a week but regularly work 60 hours plus per week, so ongoing they will have to take this into account i presume? will the formula be average earnings over a 12 month period?

SnowMan

A good summary of the judgement (and the 3 month employment tribunal rule) can be found on the ACAS website (scroll down to the section 'Holiday pay and Overtime Update: 4 November 2014'

http://www.acas.org.uk/index.aspx?articleid=1374#EATovertime

tight_scotsman

I changed jobs in May of this year after 12 years service. I was paid hourly on a 40hr per week contract. My holiday pay was based on 40 hrs per week but i did a lot more than 40 hrs per week. For example. My yearly basic was 12800 pounds. my last p60 showed almost 25k.
So you can imagine the amount of overtime i did over the year.

I did point out this injustice to my employer but they were just not interested. The reason we all did this overtime was because our contracts stated Overtime as and when required. Also there was a chronic staff shortage.I pointed out to my boss that if they employed staff to cover the overtime hours then these employees would accrue holiday hours. So why should we not get extra holiday pay to reflect the hours we worked. Again this just fell on deaf ears.

I will be persuing my former employer to recompense me under a breach of contract. Even if its only 6 years out of 12.

SnowMan

tight_scotsman wrote: »

I changed jobs in May of this year after 12 years service. I was paid hourly on a 40hr per week contract. My holiday pay was based on 40 hrs per week but i did a lot more than 40 hrs per week. For example. My yearly basic was 12800 pounds. my last p60 showed almost 25k.
So you can imagine the amount of overtime i did over the year.

I did point out this injustice to my employer but they were just not interested. The reason we all did this overtime was because our contracts stated Overtime as and when required. Also there was a chronic staff shortage.I pointed out to my boss that if they employed staff to cover the overtime hours then these employees would accrue holiday hours. So why should we not get extra holiday pay to reflect the hours we worked. Again this just fell on deaf ears.

I will be persuing my former employer to recompense me under a breach of contract. Even if its only 6 years out of 12.

You will be out of time to take the matter to an employment tribunal because it is more than 3 months since the last breach. Whether you would be able to take the matter through the county court as a claim for unpaid wages is another matter.

The dust has yet to settle after the judgement, so it is hard to say how easy claims will be to pursue.

Takeaway_Addict

amiehall wrote: »

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...

Of course it does. If someone is paying double time for overtime and then have to pay more for holiday pay it will then make the employer think...'I might as well hire someone else on the standard rate and stop employee X's over time'

tight_scotsman

SnowMan wrote: »

You will be out of time to take the matter to an employment tribunal because it is more than 3 months since the last breach. Whether you would be able to take the matter through the county court as a claim for unpaid wages is another matter.

The dust has yet to settle after the judgement, so it is hard to say how easy claims will be to pursue.

I know i am time barred on the 3 month rule
But i will persue on a breach of contract if the appeal is dismissed.

If they need to start paying the extra because they should have been paying all along. Then they owe me for an underpayment of holiday pay.