Holiday Pay

A number of recent decisions of the European Court, which have been followed by UK tribunals, have established that statutory holiday pay should include commission and certain types of overtime, rather than purely basic pay.

An appeal has been made to the UK appeal tribunal on whether commission should be included and judgement is awaited. Watch this space! In the meantime, employers should assume that commission payments, incentive bonuses and overtime should all be included in the calculation of a week’s pay.

Implementing compliant and workable holiday pay arrangements presents a serious challenge and the current decisions do not deal with what reference period should be used and how to quantify a claim for the commission element of holiday pay. It is also likely that employees will seek to bring retrospective holiday pay claims (which can go back 2 years). For assistance in navigating through this minefield area of rights, please contact a member of our team.