Partner Article

Law firm warns of holiday pay headaches

Advice for companies to deal with changes to holiday pay entitlement

Law at Work (LAW) is this week urging business leaders to prepare ahead of reports that unions are launching bids to help their members claim for holiday pay owed potentially as far back as 1998, following a key EU legal ruling earlier this year which opened the door to such claims.

The European Court of Justice has ruled that employers should take into account commission, and potentially bonus payments and overtime, when calculating holiday pay, rather than just basic pay following a test case between British Gas and one of its salesmen backed by Unison.

Workers will now be able to claim for owed holiday pay dating as far back as 1998 under the Working Time Directive. There are reports the Unite union, which has a membership of 1.4 million, is preparing to help their members launch claims against employers and that the Unison union has updated officials on the case.

Donald MacKinnon, Director of Legal Services at LAW explained that employers need to take these changes seriously. He said: “The case could lead to a flood of claims that would see employers hit with huge bills, potentially leading to some bankruptcies in the UK. The ruling also sets a precedent that could see other allowances included in holiday pay calculations, such as overtime and performance related bonuses.”

Such is the expected impact, that LAW is hosting a number of free seminars for HR professionals, senior management and business owners to explain the implications of these changes as well as the effects of the introduction of shared parental leave and the current legal challenge to tribunal fees.

The seminars will be held in England, outside London, for the first time since LAW was established in 2001, Nottingham on Tuesday 14th of October, Newcastle on 15th of October and London on 28th of October.

To find out more about LAW’s training schedule and to request your place, please visit: http://www.lawatwork.co.uk/employment-law-update

This was posted in Bdaily's Members' News section by Ellie Wagstaff .