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Uncertainty over tribunal's ruling on holiday pay

05 November 2014 by
Uncertainty over tribunal's ruling on holiday pay

There is uncertainty how a ruling by the Employment Appeal Tribunal to include overtime in holiday pay will impact the hospitality industry.

The tribunal's decision means that some people working overtime could claim for additional holiday pay. Currently, only basic pay counts when calculating holiday pay.

It is also expected that workers will be able to make backdated claims, but only for a limited period.

The ruling is expected to impact industries where staff are required to do overtime as a regular part of their job, as is the case in the hospitality sector.

Jonathan Rennie, employment partner at law firm TLT, said the decision will lead to higher wage costs for many employers, but that the anticipated retrospective claims going back numbers of years may be more limited.

"(The tribunal ruling) found that non guaranteed overtime is part of normal remuneration and must be included in holiday pay, as must any other fluctuating payments such as shift allowances and comparable payments where they are intrinsic to work," he explained.

However, Martin Couchman, deputy chief executive of the British Hospitality Association, said it was hard to say what the impact will be on individual companies.

"It is likely that the government will appeal against these decision and that process will take a considerable time," he said.

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