Holiday pay for workers UPDATE

The Unite union, which represents the claimants in the Hertel (UK) Ltd v Woods and others UKEAT/0160/14 and AMEC Group Ltd v Law and others UKEAT/0161/14 cases, has announced that they will not be appealing the EAT’s decision. This means that, in most cases (and subject to any appeal by the employers), workers claiming underpaid holiday pay will not be able to bring claims stretching back many years.

The EAT decided that non-guaranteed overtime must be taken into account in calculating statutory holiday pay derived from the Working Time Directive, but limited the extent to which workers can make retrospective claims for underpaid holiday. The effect on historical claims was regarded as the more controversial aspect of the decision, and was described by Langstaff P as being of “public importance”. Before the decision, employers had been concerned that retrospective unlawful deduction claims for underpaid holiday could go back to 1998, when the Working Time Regulations 1998 came into force.

Unite’s announcement means that workers will not be able to bring claims based on a series of deductions, where there has been a gap of more than three months between the deductions. Explaining its decision, a Unite spokesperson said: “We don’t want to bankrupt business; going forward it is about ensuring employees are paid their fair share and working with employers to ensure they get their house in order.”

The expert team at HardingEvans are available to advise on what this means for your business. Contact Daniel Wilde for more information on 01633 244233 or email at wilded@hevans.com