Despite the rather unseasonal time of year, holidays seem very much to be flavour of the month. We’re receiving more and more queries about the possibilities of US-style unlimited holiday or “personal time off” policies, as most recently (and very publicly) adopted by Richard Branson. We talk about the risks and rewards of such policies in our recent blog post available here.
In the meantime, hot off the press, many of you will already have read or heard in the press about the Employment Appeal Tribunal decision this week (Bear Scotland Ltd & Ors v Fulton & Ors) which ruled that overtime should be included in holiday pay. This follows the European Court of Justice case earlier in the year (Lock v British Gas Trading Ltd) which decided that commission should be included.
Both those cases are fraught with much practical difficulty and the position is still far from clear – we will be examining the interplay between them and the current state of the nation on holiday pay generally in light of all these developments, in a forthcoming alert – so watch this space…
The immediate message in the meantime is don’t rush to the calculator! It’s too early to tell how these cases will play out, and we wouldn’t recommend you re-write your holiday pay policy or start negotiations about backdated pay just yet; claims are likely to be hard to make in many cases, with potential time limitation difficulties for employees. This is not to say you should ignore the decision but for the time being at least, until we have greater clarity, each situation should be reviewed on its own circumstances, though you may want to consider factoring in potential payments to budgets and financial forecasts.
The Bear Scotland decision seems likely to be appealed and may ultimately go all the way to the European Court of Justice. Vince Cable has also announced a taskforce to assess (or “limit the impact of”, as BIS perhaps more revealingly tweeted) this judgment, which understandably has got a lot of employers concerned.
So hold tight for now and if your staff do start making noises about the case – give us a call!