Employment Appeal Tribunal: Overtime Should be Included in Holiday Pay

In a landmark case, the Employment Appeal Tribunal ruled that overtime should be included in holiday pay.

This means that people working voluntary overtime could now have their holiday pay recalculated to take into account overtime. Currently, only basic pay counts when calculating holiday pay.

The details of the ruling are yet to be released which would determine whether or not the claims can be backdated.

Critics are of the view that the judgment could open the floodgates for claims against employers and small firms could be wiped out completely if it is backdated.

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

According to the government’s statistics, it has been estimated that at least five million workers could benefit from this ruling. It could impact about 400,000 firms in the UK. However, the ruling is likely to be appealed against which means that a final decision may be years away.

The government officials responded to the changes saying they will review the ruling in detail and are concerned about the potential impact on employers.


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