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Holiday appeals found in favour of employees – non-voluntary overtime must be included

The EAT has this morning handed down judgment in the joint appeals of the Bear Scotland, Hertel and Amec cases. The judgment confirms that workers have the right under Article 7 of the Working Time Directive (WTD) to be paid “normal remuneration” during their 4 weeks “EU leave”.

Calculating holiday payPay must therefore be calculated based on typical average pay and not based only upon basic hours’ pay, which has been the long established position under the UK’s Working Time Regulations (WTR).

In all of the appeals before the EAT, the facts concerned non-voluntary overtime.  This therefore leaves the door open to further case law to seek clarity over the degree to which overtime must be “voluntary” and the regularity with which such overtime would need to be performed to conclude that it falls within a worker’s “normal remuneration”.

The EAT concluded that it was possible to read the WTR in accordance with the Marleasing principle, which broadly requires domestic law to be read in a manner which is consistent with EU law.

The EAT determined that the WTR could be read in a manner that achieves compliance with Article 7 of the WTD.  This outcome potentially gives a significant number of UK workers – who have been paid holiday pay calculated on their basic hours’ only – claims for unlawful deductions from wages.

The good news for employers is that the employers’ appeals succeeded in some respects in relation to the issue of limitation.  The EAT held that if there was a gap of more than 3 months in any alleged series of deductions from wages, employment tribunals would lose jurisdiction to hear claims for the earlier deductions.  Workers are not entitled to artificially designate holiday retrospectively as “EU leave” or “UK leave” so as to create an unbroken chain of deductions.

These conclusions will severely restrict the ability of workers to pursue retrospective claims which it had previously been feared could go back to the commencement of employment or the introduction of the WTR. This conclusion means unions and workers will not yield the windfall payments many were hoping for.

More thoughts, comments and tips to follow once we have fully digested the lengthy judgment.

Our holiday pay hub is your resource for holiday pay issues and contains all our holiday pay blogs.

Keep up to date and follow us: @dwf_employment

 

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Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further