holiday pay

Holiday pay: 12.07% formula should not be used for workers with no normal working hours

In a decision which potentially significantly impacts employers who engage workers under arrangements which do not have set normal working hours, the Court of Appeal has confirmed that holiday pay should not be calculated on the basis of 12.07% of hours worked but instead should be based on an average of earnings in the 12 weeks before leave is taken. As the crux of this case was whether workers who do not work throughout the year should receive less holiday entitlement and holiday pay than those who do, the decision will particularly affect businesses which engage workers who work less …

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Court of Appeal confirms non-guaranteed and voluntary overtime are in scope for holiday pay calculations

This week, in the latest development on holiday pay, the Court of Appeal gave its judgment in East of England Ambulance Service NHS Trust v Flowers and confirmed that both non-guaranteed and voluntary overtime are in scope for inclusion in holiday pay calculations in respect of the 4 weeks’ Working Time Directive holiday entitlement, provided that the overtime is broadly regular and predictable. There is no requirement that the overtime is compulsory under the contract of employment. In giving its judgment, the Court of Appeal gave extremely short shrift to the ECJ’s comments in Hein v Albert Holzkamm GmbH & …

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ECJ rules that a worker cannot automatically lose his acquired rights to paid annual leave because he did not apply for leave

The ECJ has handed down judgment on 6 November 2018 in Kreuziger v Land-Berlin and Max-Planck-Gesellschaft, a case concerning the circumstances in which the right to compensation in lieu of annual leave on termination of employment may be lost. The ECJ concluded that a worker cannot automatically lose his acquired right to paid annual leave because he did not apply for leave. Mr Kreuzinger was a legal trainee with the Land of Berlin, Germany between May 2008 and May 2010. From 1 January 2010 to the end of his traineeship he did not take any annual leave. When his traineeship …

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ECJ: A worker must be able to carry over paid annual leave when an employer does not allow him to exercise that right

The ECJ held today in King v The Sash Window Workshop that a worker must be able to carry over and accumulate rights to paid annual leave when an employer does not put that worker in a position in which he is able to exercise his right to paid annual leave. EU law precludes the requirement that a worker must actually take leave before establishing whether he has the right to be paid in respect of it. The decision could have a significant impact on the worker status claims currently making their way through the courts. Mr King worked for The …

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Holiday pay must include payment for any voluntary overtime normally worked

In the latest instalment to the litigation surrounding the correct calculation of holiday pay, the EAT has held that payment for voluntary overtime that is normally worked is within the concept of ‘normal remuneration’ and should therefore be taken into account in calculating holiday pay for the 4 weeks of holiday provided for by the Working Time Directive (WTD). This is the first binding decision in England and Wales on the issue of voluntary overtime. In Dudley Metropolitan Borough Council v Willetts and others, the tribunal considered whether a number of different payments should be treated as forming part of …

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Holiday pay must include results-based commission: Court of Appeal decision in Lock v British Gas

The Court of Appeal has confirmed in its decision today in Lock v British Gas that holiday pay must include a representative element of results-based commission. The Court did not comment, however, on whether the 12 week reference period adopted by the tribunal for calculating the commission element was correct in all cases, and indicated that there may be questions as to what is the appropriate reference period in any particular case. The brief facts are that Mr Lock was employed by British Gas as a salesman, earning a basic salary of under £15,000 but with substantial potential for commission …

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