We are in a position to advise: -

(a) Employers wanting advice over, or defending, claims for arrears of holiday pay or over the calculation of future holiday pay; and

(b) Executives/Employees pursuing complex or high-value claims of this kind, most likely where arrears can be backdated over a lengthy period or involve substantial commission arrangements.

Two sets of cases have potentially opened the floodgates to claims for arrears of holiday pay, some of which may be substantial.

In November 2014, the Employment Appeal Tribunal held in 3 cases that regular non-guaranteed overtime should be included in the calculation of holiday pay. These cases may be appealed further but it is thought most likely that these rulings would be upheld.

In July 2014, the European Court of Justice ruled that bonus and commission payments should also continue to be paid during holidays.

What action should you take?

Both sets of cases affect the calculation of holiday pay into the future. Large numbers of employees may be affected by these cases.

But both also carry the danger of triggering claims for arrears of pay. Although the most recent decision imposes some limits on backdating claims, in some cases they may still extend back a substantial period.

Some employers will also face claims from multiple employees.

Both the law – and the calculation of holiday pay due – are likely to be complex.

If you have not yet received claims, updating your contracts and holiday pay procedures prevents further exposure and may reduce the chance of arrears claims. Many employers will also consider making greater use of agency staff, in place of extended overtime, as a consequence.

We specialise in defending, and pursuing, claims of this kind. As business lawyers, if a claim has any merit, we will advise over the best way of closing it off quickly and of limiting the chance of it becoming a precedent for other employees.

Your specialist: David Cooper or Andrew Cox

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