“Holiday pay case found in favour of workers will result in thousands of back dated payment claims!”
Millions of workers who received commission payments or overtime yesterday discovered they are entitled to additional holiday pay the result of an employment tribunal ruling.
Businesses are likely to see the application of back dated holiday pay to the scale not seen before the PPI (payment protection) scandal.
The argument centered on the crucial point of whether holiday pay should be based on basic income or an employee’s average earnings, including overtime and commission.
The complex case revolved around the EU’s working time directive which gives staff the right to 20 days paid holiday a year and whether the UK working time regulations which implemented the directive, give force to this more generous interpretation of holiday pay.
New legislation deriving from the decision is likely to cost businesses millions of pounds and force employers to reduce staff holiday entitlements.
With trade unions desperately clambering to negotiate backdated payments and individuals making claims we could see the tribunal system grinding to a halt.
This poses a real risk to businesses and their ability to grow and also may have a significant effect on the wider economy as uncertainty builds.
Calls have been made for the UK Government to step in and limit the retrospective liabilities businesses will face.
Vince Cable the business secretary said: “the Government will review the judgment in detail as a matter of urgency”.
For more information on protecting your business in light of this new ruling contact Simpla HR.