Holiday pay update

Angela Renwick
Angela Renwick
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There have been recent developments in case law concerning workers’ holiday pay. In light of these developments, we consider that there are two key points of which employers should be aware when calculating holiday pay:

Should voluntary overtime be taken into account when calculating holiday pay?

Yes – if voluntary overtime is a regular and consistent feature of their work and is paid over a sufficient period of time, then it should count towards ‘normal’ remuneration and therefore be taken into account when calculating the holiday pay due to a worker.

Can a gap of more than three months between one underpayment of holiday pay and the next break that ‘series’ and prevent a worker from bringing a claim for unlawful deductions from wages?

Not in Northern Ireland, which means that there is a clear divergence between Northern Irish Law and the law in Great Britain. A Northern Irish court has ruled that where there is a gap of more than three months between one underpayment of holiday pay and the next, this will not prevent workers from raising a claim in respect of historic arrears of holiday pay. It was previously considered that such a gap would break the ‘series of deductions’ and therefore leave the worker unable to challenge this. This case may encourage claimants’ solicitors to challenge the previously established rule in the Bear Scotland case, which we told you about here.

If you would like to discuss the implications of these developments further, or if we can provide any other assistance or support on other employment law matters, please do not hesitate to contact our team on 0141 331 5150.

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