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Liverpool HR expert warns holiday pay ruling could be final nail in the coffin for entrepreneurs

A ruling that holiday pay must factor in regular overtime stretching back to 1998 could devastate entrepreneurs who are driving the economic recovery according to a Liverpool HR firm.

According to the Employment Tribunal Appeal ruling won for workers by the Unite union, employees who work regular paid overtime must now have that pay included in their holiday pay.

Victoria Brown, managing director of Liverpool-based HR provider High Performance Consultancy believes the ruling will have a negative impact on growth and called on the Government to act fast or risk destabilising the economy.

“This decision could put many small and medium-sized businesses, which have worked hard to consolidate and grow during the financial crisis, out of business,” she said.

“Times are still tough for SMEs and they do not get the support and recognition they deserve for their role in driving the economic recovery.

“Now many face going to the wall because if claims come in from employees, they will not be able to pay. These companies often already pay overtime to employees in order to maximise productivity and they are not cash-rich businesses.

“We are already receiving calls from clients and are advising them on how to manage this in the short-term and what measures they need to take going forward. But for some businesses going forward may no longer be an option as the costs involved may result in that business having to cease trade.

“The Press has made much of potential claims arising out of this ruling and the threat of such claims is clearly worrying to business owners. High Performance Consultancy would advise should you find yourself in receipt of such claim, before responding in any way you seek advice.

“The Government is looking at the implications of the ruling but action is needed now because by the time the coalition has investigated this, for some it may be too late.”

This was posted in Bdaily's Members' News section by Dan Minchin .