Tom Stenner-Evans
Posted on 29 Oct 2014

Preparing for the holiday back pay backlash

We thought we should alert you to the risk of holiday back pay claims being brought against you by claims companies seeking to capitalise on recent European cases suggesting that holiday pay should be based on 'normal pay' (i.e. including overtime, commission, shift payments etc.). The stated EU rationale is that statutory holiday pay is a health & safety right, and that payment of basic pay only may be a disincentive to take sufficient time off work.  

In particular, we are aware of one claims company specifically targeting people doing sales jobs, or work shifts and/or unsocial hours, and alerting them to potential holiday back pay claims, which may go back over several years. They are currently aiming their campaign at Scottish workers, but it is only a matter of time before similar advertisements are likely to appear in the rest of the UK

We are awaiting Judgment in an important test case in the English Employment Appeal Tribunal which it is hoped will throw further light on this complex subject.  We will send out a further briefing once we have that ruling (due any time).

In the meantime, you might receive either a grievance, lodged by the claim company on behalf of your employee, or a call from ACAS under the Early Conciliation Scheme, claiming back pay.  In either event, it will be worth taking specific advice on the legal position, particularly before conceding any claim (however small), which could then set an unhelpful precedent for other workers.

This is undoubtedly one of the most significant, and potentially very costly, current employment law developments, and is therefore something we will be discussing in more detail at our Annual Employment Law Conference.