Breaking: Historic holiday pay result

Unite led the way in a ground-breaking employment appeal tribunal decision announced this morning (November 4), which means that all UK employers must now include overtime pay when calculating workers’ holiday pay.

Today’s historic ruling could potentially impact over 5m employees across the country who get paid overtime.

The case, which was brought forward by Unite, involved 16 of the union’s members, including electricians, scaffolders and semi-skilled operatives, who had worked on a project at a Nottinghamshire power station site until the project ended in 2012.

During the project, the workers were frequently required to work overtime and received payments for travel time. Overtime work payments were not included when calculating holiday pay, which meant that the workers were being paid significantly less during their holidays as compared to what they were earning when they were working regularly.

The appeal tribunal ruling, involving companies Amec and Hertel, is followed by an earlier February appeal case which ruled in favour of workers, along with other recent decisions by the European Court, solidifying the idea that holiday pay should be based on normal pay, not basic income.

In response to today’s victory, Unite executive director for legal, membership and affiliated services Howard Beckett said, “Up until now some workers who are required to do overtime have been penalised for taking the time off they are entitled to.”

“This ruling not only secures justice for our members who were short changed, but means employers have got to get their house in order,” he added.

Appearing on various television programmes this morning, Beckett clarified that the ruling would not “open the floodgates” for millions of pounds in backdated pay, as government and business leaders have spuriously claimed.

Beckett decried the “scare tactics” used to frame the decision as a threat to businesses and the economy, arguing that the result should not pit employers against employees.

“The decision as it stands is in fact very pragmatic,” Beckett argued. “There is little exposure to employers on back pay but it means going forward that employers will have to pay workers their correct entitlement.”

Beckett emphasised that the decision simply meant granting workers going forward what they already should be entitled to but from which they have been robbed in the past.

“I think most people who work in regular salaried positions would find it hard to imagine that some people might get, say, 30 per cent of their normal wage packet when they take a holiday,” he said.

“This decision means the massive exposure to historic claims does not arise but it means that going forward an employee should have a holiday wage packet to reflect what they would normally expect to receive in a working week pay packet,” he added.

The appeal ruling reverses a decision made in 2004 in the case of Bamsey v Albon Engineering and Manufacturing Plc. In Bamsey, the tribunal held that overtime pay should only be included in workers’ holiday pay if the overtime was contractually guaranteed.

Bamsey and others argued that this was an incorrect way of calculating holiday pay, because in his case, as with many other employees who work overtime, overtime arrangements were often compulsory but weren’t necessarily contractually guaranteed. In effect, since 2004, some have received less than half their normal pay when they were on holiday.

Now that the tribunal has ruled the decision in Bamsey was wrong, workers who are regularly required to work overtime should have their overtime pay included in their holiday pay under European Law.

Stay tuned on UNITElive.org as more details on the tribunal decision emerge.