As has been widely reported in the media, we have had another holiday pay case which may cause employers concern. The EAT has handed down its decision in the Bear Scotland v Fulton & others, which has held that holiday pay needs to be further expanded. Workers are entitled to be paid normal non-guaranteed overtime as part of their 4 weeks basic WTR holiday payments. It does not apply to the additional 1.6 weeks leave added under the WTR subsequently.
There may yet be an appeal to the Court of Appeal given the significance of the decision. The Government has announced an urgent taskforce to review the decision and its implications. Workers can bring claims for holiday pay provided the last deduction or failure to pay in a series occurred within three months. Otherwise they must satisfy the Tribunal that it was not reasonably practicable.
Employers are handling this in different ways. Some are ceasing overtime for the interim, others are introducing gaps for employees to break the series of deductions, some are doing nothing pending the appeal and others are immediately recalculating their workers’ holiday pay entitlements. Employers should seek advice on the best policy for their business.