SUMMERTIME is prime holiday time, but as workers skip gleefully out of work adorned with sunglasses and sun hats, employers may be less delighted about the prospect of paying them while they are not in work. The upside is that staff will come back to work refreshed and ready for the fight.
However, staff may have in mind a different battle to employers. Although most types of employment tribunal claims are down, holiday pay claims appear to be on the increase.
SUMMERTIME is prime holiday time, but as workers skip gleefully out of work adorned with sunglasses and sun hats, employers may be less delighted about the prospect of paying them while they are not in work. The upside is that staff will come back to work refreshed and ready for the fight.
However, staff may have in mind a different battle to employers. Although most types of employment tribunal claims are down, holiday pay claims appear to be on the increase. Employers need to be aware that once returned to work, the holiday in the sunshine a distant memory, staff may be ready for a fight to obtain more pay.
One reason for an increase in holiday pay claims is likely to be the expectation of a higher rate of holiday pay, following a raft of high-profile cases on the subject. For some employers, gone are the days when they can simply pay basic salary to employees during their holiday. Recent cases essentially set out that the following (amongst other things) should be taken into account when calculating holiday pay:
* overtime – as a general rule if this is compulsory or regularly worked;
* bonuses based on performance;
* commission;
* call-out supplements; and
* antisocial hours allowances.
One positive point to note is that in most cases this type of calculation will only apply to four weeks of holiday entitlement (not the full 5.6 weeks employees are entitled to under UK law).
A principal reason that employers should take the above sums into account, according to the European courts, is that employees could be discouraged from taking their holiday if they are going to be out of pocket for doing so. Tribunals are therefore likely to come down hard on employers if there is a breach.
Perhaps worse than paying employees a higher rate when they’re on holiday is when an employee returns from what an employer thought was holiday, only to announce that actually they were sick and they need to take their holiday at another time. Employers need to have a policy in place to address when and how staff can claim back their annual leave.
To learn more about minimising the risk of holiday pay claims and for advice tailored to your organisation, contact us at FG Solicitors on 01604 871143.