Holiday Pay

Holiday Pay

There are now two time limitations upon a worker bringing a claim for a short payment of holiday pay.  The first limits the shortfall to that which has occurred for up to a two year period.

The second limitation in time is that it is too late for a worker to bring a claim at all if three months has passed since the last short payment complained of.

European directives (at present!) take precedence over domestic enactments of those directives if domestic legislation gives a lower level of protection or entitlement than the directive.  Decided cases interpret the directives and so put flesh on the bone. From these cases the general principle has been established that holiday pay must “reflect normal pay”.  These cases have decided that one off bonuses do not amount to normal pay.

Examples of normal pay, according to the Courts, are:

  • on call payments;
  • piecework premiums;
  • overtime;
  • commission.

UK entitlement to holidays exceeds the European minimum by 1.6 weeks (5.6 rather than 4 weeks).  An employer in this Country, therefore, is entitled to take into account the type of payments listed above in calculating normal remuneration only in respect of the first four weeks of holiday taken and in respect of additional holiday under domestic law to ignore the “extras” such as commission payments.

The above deals with the minimum position at law and employers should always remind themselves of the contents of the agreement between themselves and their workers before limiting holiday pay to the statutory minimum.

For further information about employment law contact Nigel Pepper Consultant or Patrick Nelson Solicitor on 01785 211411.