2014/57 Non-guaranteed overtime must be included in statutory holiday pay but the scope for retrospective claims has been limited (UK)
The Employment Appeal Tribunal (‘EAT’) has held that workers should be paid “normal remuneration” for their four week holiday entitlement under the Working Time Directive (the ‘Directive’). Normal remuneration includes payments for overtime which the employee must work if required by the employer but the employer is not obliged to offer (non-guaranteed overtime). The EAT also held that the Working Time Regulations 1998 (the ‘Regulations’), which implement the Directive into UK law, can be read purposively in order to achieve this, despite the fact that on the face of the wording they do not provide for such payments to form part of holiday pay.
In a blow for employees, however, the EAT has limited the extent to which employees can claim retrospectively for under-paid holiday by deciding that workers cannot bring claims for a series of “unlawful deductions” from holiday pay where there was a break of at least three months between successive underpayments.
Further, the additional 1.6 weeks’ annual leave provided by the Regulations but not required by the Directive does not have to be paid at the rate of normal remuneration but can be paid at the rate set out in the Regulations.
Employment Appeal Tribunal, 2014-11-04