LATEST: EAT holiday pay ruling: check contracts, says lawyer…
In a ground-breaking case* at the Employment Appeal Tribunal (EAT) last week, workers won their case to have overtime included in their holiday pay.
But an employment lawyer at regional firm Lodders Solicitors is urging workers to check the details and obligations of overtime expectations in their employee handbook and any policies on overtime, before approaching employers about a claim.
“This unexpected decision was handed down on Tuesday 4 November and means that employers will now have to include overtime as well as basic pay when calculating employees’ holiday pay entitlements,” explains Sonia Mangat, employment lawyer with Lodders.
“With the EAT also ruling that some backdated claims will be allowed, the figures could run into millions of pounds, with the biggest impact being felt by businesses in sectors that rely heavily on overtime workers.”
To employees who feel they may be entitled to make a claim, Sonia gives some practical guidance on the steps they must take before doing so, starting with checking the detail in their contract of employment:
“Not every worker will be able to make a claim, nor automatically be due a payment, so it is vital they look at their contract of employment first, and then decide whether or not they fall under the criteria.
“Employees should first ask themselves ‘Do I have a claim against my employer’? It’s important for them to know that this judgment is directed at those workers whose overtime is stipulated in their contracts. So to answer this question, workers must also consider: ‘Am I obligated to do overtime?’ and ‘Did I actually get paid for extra hours when it came to my holidays?’
“The ETA decision means that regular ‘voluntary’ overtime is not covered, so this point must be checked in the contract too.
“The final question employees should ask is ‘Can I claim everything back?’. The judgement allowed for any money that should have been paid in the past three months only, which for employers that rely on overtime workers represents a small silver lining in the wake of the ruling.”
Sonia adds: “Whilst this is a somewhat unexpected outcome to the Tribunal case it is one with many repercussions for both employers and employees.
“Due to the important issues raised in these cases, not least the financial implications of the decision, we can expect it to be challenged as parties have been given permission to do so. However, inferences could be drawn from the decision that the appeal is unlikely to be successful.
“For both employees and employers, it’s sensible to review the employee handbook and any policies on overtime and seek advice from an expert who can advise the employee whether or not they have a claim and guide them through the process, and support employers reviewing any claims.”
*Bear Scotland Ltd and others v Fulton and others; Hertel (UK) Ltd v Woods and others; Amec Group Ltd v Law and others.
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