Holiday Pay – Not So Relaxing!
05 March 2015
Following the landmark “Bear Scotland” judgment of the Employment Appeals Tribunal in GB, businesses are making tentative steps towards reassessing how they calculate employees’ holiday pay.
Until the Bear Scotland judgment, holiday pay for most workers was typically calculated with reference to basic pay only. However, the judgment of the EAT makes clear that holiday pay should correspond to “normal remuneration” and, in particular, that most types of overtime payments must also be taken into account in the calculation. Many businesses are now fearful of the risk of claims for back pay, and although the Bear Scotland judgment limits that possibility, it does not eliminate the risk completely. For that reason the GB government has introduced legislation (coming into force in July 2015) limiting the period for retrospective claims to two years, and we understand that the Department of Employment and Learning has recently written to key stakeholders seeking their views about whether similar legislation should be introduced in Northern Ireland.
The employment law team at Carson McDowell have prepared a more detailed note about the judgment and its implications, which can be found HERE.