There have now been two cases, one in Scotland (Bear Scotland vs Fulton) and one in England (Amec Group vs Mr Stephen Charles Law) where employees have argued that non-contractual overtime should have accrued holiday pay. Until this week, the only previous legal cases have failed but these employees’ claims have been upheld, i.e. there is a chance that they will be successful.
The defendant companies have appealed against the claims and we’re waiting to see what the EAT (Employment Appeal Tribunal) does. If their appeals are rejected, and it’s still an “if” at this stage, it could mean that the government has to amend the WTR (working time regulations) because it’ll be deemed that it wasn’t sufficient and our agencies will have to start paying holiday on overtime rates, either across the board or to some extent, depending on the outcome.
The fact is that right now the law isn’t changing and so for now its business as usual. That said, if and when it happens companies who pay overtime without holiday applied (which isn’t all by any means) could face employees coming back and demanding back-pay of holiday – How would you cope if this happened to you?
There’s no getting away from the fact that this is a serious risk and if it comes to it, it's possible that there will be a number of small companies put out of business. A scary thought but this could be the tip of the iceberg, think PPI claims? Might we see a slew of no-win no-fee solicitors offering to fight for back-dated holiday pay (claiming is possible for 7 years in lieu) and some middle-men profiting from offering to analyse HR systems and historic pay schemes?
Would your Excel sheets and current software provider be able to accommodate the new changes?
5th November 2014