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Staff Holiday Update

Updated on 10 July 2015, 851 views

Aren’t Holidays Supposed to Be Restful?!

Adrian Poole, Partner at Porter Dodson Solicitors, updates you as to the legal position over staff holiday.

You may have heard a lot in the news over the last 6 months regarding the calculation of worker’s holiday pay. This is because, in addition to current legislation there have been a number of high profile recent court judgments on the topic.

This briefing notes brings together the outcomes of the recent case law, along with current legislation.

Firstly, it is helpful to set out key definitions:

Guaranteed Overtime (Compulsory): Overtime which the employer is bound to offer and pay for under the contract.

Non- Guaranteed Overtime: Overtime which the employer is not obliged to offer the worker but if it is offered, then the worker is bound by his or her contract, to work it.

Voluntary Overtime: Overtime which the employer can offer but the worker has no obligation to accept the request under his or her contract.

Commission: An amount of money that a worker receives directly as a result of making sales.

Main Points:

Guaranteed and Non-Guaranteed overtime should be factored into the calculation of a workers statutory holiday pay.
There is currently no clear case law on whether voluntary over time should be included in the calculation.
Commission payments should be included in statutory holiday pay calculations.

Non Guaranteed Overtime:

The case of Bear Scotland v Fulton dealt with the calculation of holiday pay when non-guaranteed overtime had been worked. The judgment held that:

Workers should have normal non-guaranteed overtime taken into account in their holiday pay.
To be able to lodge an Employment Tribunal claim in respect of underpaid holiday pay, the underpayment must have occurred within 3 months of lodging the claim.
If there is more than one underpayment, any claims in respect of earlier underpayments will fail if there has been a break of more than 3 months between the underpayments.
It is only the 4 week’s annual leave entitlement under the Working Time Directive “WTD” (European Law) that is affected by this judgment. Not the total 5.6 weeks holiday entitlement provided for under UK  law.

Commission:

Commission must be included in holiday pay in respect of the 4 week’s statutory annual leave under the WTD, not the additional 1.6 weeks of statutory annual leave provided for under UK law, or for any further holiday entitlement that may be given in the contract.

Currently there is no clear legal answer as to how the holiday pay calculation should be made. Although the final judgment in Lock v British Gas Trading Limited is expected to deal with this point in the near future so to provide some degree of clarity.

Work Related Travel:

This typically means travel that is made for the purpose of work but is not part of a worker’s normal commute to their usual place of work.

A case joined to the Bear Scotland case was heard in the Employment Appeal Tribunal and  determined that payment made for time spent travelling to and from work as part of a workers normal pay, may need to be calculated into holiday pay.

Given the lack of certainty within this judgment it is expected that there will be further cases on this point.

Holiday Pay and Sickness

A workers holiday entitlement will continue to accrue during his or her sickness absence.

The recent case of Plumb v Duncan Print Group Ltd  further held that if a worker is not permitted by his or her contract or by any law to take holiday during a period of sickness absence which coincides with a holiday year, then he or she is entitled to take the holiday in a subsequent holiday year. 

Conversely, if he or she is permitted to take holiday while on sick leave, then he or she may take that leave during the sickness leave or choose to take it at a later date.

Lastly and rather crucially a worker who is absent from work on sick leave is not required to prove that he or she is physically unable to take holiday because of a medical condition/sickness.

Should you have any concerns or queries relating to this or any other employment law/HR matter, Adrian Poole will be happy to provide additional advice on 01935 846802

 

 

 

 

 

 

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