Overtime Should Count in Holiday Pay

Workers have won a groundbreaking case at the Employment Appeal Tribunal to include overtime in holiday pay.

This means all people working voluntary overtime could claim for additional holiday pay. Currently, only basic pay counts when calculating holiday pay.

The details of the ruling, particularly on whether claims can be backdated, have yet to be released.

The ruling could be appealed to the Court of Appeal, meaning a final decision may be years away.

The ruling has widespread implications for all companies paying overtime to their staff.

The government estimates that one-sixth of the 30.8 million people in work get paid overtime. This means around five million workers could be entitled to more holiday pay.

The coalition and business groups had argued strongly that overtime should not be included in holiday pay calculations.

If claims can be backdated, businesses stand to lose billions of pounds, some estimates suggest.

“Up until now some workers who are required to do overtime have been penalised for taking the time off they are entitled to,” said Howard Beckett of Unite.

“This ruling not only secures justice for our members who were short changed, but means employers have got to get their house in order.”