In the news: non-guaranteed overtime must be included in holiday pay

In a landmark ruling at the Employment Appeal Tribunal (EAT), workers have won the right for overtime to be included when calculating holiday pay.

The EAT held that “non-guaranteed overtime” (work which a worker is required to work, but the employer is not required to offer) should be taken into account when calculating holiday pay. Previously, additional payments for regular overtime have not been included and only a worker’s basic pay has been taken into account when calculating holiday pay.

However, the EAT has limited the potential for backdated claims, ruling that workers cannot claim more than three months after the last incorrect payment. The EAT granted leave to appeal in respect of both points.

The full judgment can be viewed here.

Please contact a member of Rooks Rider Solicitors’ Employment Team for further information.

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