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Overtime pay fight likely to go on for many years

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You may be aware in the news recently that workers have won a ground-breaking case at the Employment Appeal Tribunal to include overtime in holiday pay.

This development means some people working overtime could claim for additional holiday pay whilst currently, only basic pay counts when calculating holiday pay.

The tribunal also ruled that workers can make backdated claims, but only for a limited period.

However, in all the furore over the ruling what has been overlooked is the ruling could be referred to the Court of Appeal, meaning a final decision may be years away.

This ruling has widespread implications for businesses where staff are required to do overtime as a regular part of their job. Lawyers said the tribunal was not clear on whether the ruling applied to workers doing voluntary overtime.

Just to clarify it from an employment law specialist point of view normal pay is normal pay and that should be paid when you are on your holiday. Even though this was not spelt out in the ruling, this referred not just to compulsory overtime but to any overtime that is worked on a regular basis.

Until now, some workers who are required to do overtime have been penalised for taking the time off they are entitled to and union chiefs have welcomed the ruling.

It is a development likely to affect many as of the 30.8m people who work in the UK 5m do voluntary or compulsory overtime.

The Government and business groups had argued that overtime should not be included in holiday pay calculations and were particularly concerned about a raft of back payments potentially going back many years.

But backdated claims have been limited, with the tribunal ruling that employees cannot claim more than three months after the last incorrect payment.

The government have taken action already as on the day of the ruling, Business Secretary Vince Cable said he would be setting up a task force to assess the impact of it.

Businesses are concerned about the extra money they will have to pay out with CBI director general John Cridland saying the judgment must be challenged and the Government should fight it.

Mr Cridland and many employers feel it could cripple some companies and so it is clear this is a battle which will go on.

Sometimes in the news we can all get carried away with the headline, but taking the sensationalism out of it saying it from a legal perspective there is still a big if about this altering overtime holiday pay significantly.

It’s still news very much in the might and could happen camp rather than ‘is happening.’ In short it is a development worthy of interest to see how it develops, but as far as changing things goes that hasn’t happened yet.

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