Since our update in June, there has seen major developments in an employee’s holiday pay entitlement, with the Employment Appeal Tribunal’s decision in Bear Scotland v Fulton handed down in July 2014.
The case established that ‘normal remuneration’ for the purposes of calculating holiday pay should include non-guaranteed overtime payments that the employee would normally receive. This would bring it within Article 7 of the Working Time Directive. The decision will undoubtedly have significant financial implications for businesses.
The judgment provides assurances for employees who otherwise may feel deterred from exercising their right to take their holiday entitlement. A crucial part of the judgment however, provided good news to employers; a claim for underpayment of holiday pay needs to be brought within three months of the deductions.
It has been a waiting game for most employers until just a few weeks ago where it was announced that Unite will not be appealing the EAT’s decision in Bear Scotland v Fulton case, which essentially prevents claims for holiday-pay going back to 1998 when the Working Time Regulations came into force. Although a sigh of relief for now, it would not be surprising if we see challenges to the judgment in Bear Scotland v Fulton, but nevertheless, this is a landmark decision, changing the dynamics of holiday pay claims.
This article written by:
David Malamatenios of Colman Coyle
