Overtime to count towards holiday pay

4th November 2014

The Employment Appeal Tribunal (EAT) has this morning handed down judgment in AMEC Group Ltd v Law and related appeals which considered whether employers were obliged to count overtime when calculating holiday pay.

The EAT has confirmed that workers are entitled to be paid "normal remuneration" during periods of holiday. This means that workers should be paid their typical average pay (including overtime and other variable amounts), not only basic hours' pay, whilst on holiday.

However one significant issue for employers is that the EAT has confirmed that if there is a gap of more than three months in any alleged series of deductions, the Employment Tribunal loses jurisdiction to hear claims for the earlier deductions. This element of the judgment may curtail the ability of many employees to bring claims for under paid holiday stretching back several years and should, therefore, be good news for employers.

We are yet to receive the EAT's full judgment and will provide a further update on the case once the details are to hand.

For more information on employment related issues, please contact the employment team on 0845 111 5050.


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