06-11-14

Landmark Ruling on Overtime and Holiday Pay
The Employment Appeal Tribunal has handed down judgment in Bear Scotland -v- Fulton (and conjoined cases), ruling that non-guaranteed overtime must be taken into account for the purposes of calculating holiday pay.  Whilst there is now scope for workers to pursue claims against their employers for underpayments of holiday pay, they are only able to bring such claims within 3 months of the last in a “series” of relevant deductions.  The EAT held that whether there is a series of deductions is a question of fact, requiring there to be sufficient factual and sequential link between the underpayments.  However, if there is a gap of more than 3 months between any two deductions in the chain, the “series” of deductions is broken. \
 
Whilst the EAT has granted parties permission to appeal to the Court of Appeal on the points on which they lost, it also gave a clear indication that the only point that may be have sufficient grounds of appeal relates to the meaning of a “series” of deductions. 
 
Business leaders believe that the judgment must be challenged and want the UK government to “step up its defence of the current UK law, and use its powers to limit any retrospective liability that firms may face" whilst Business Secretary Vince Cable commented that he intends to set up a task force to assess the impact of the ruling to properly understand the financial exposure employers face. 
 
For more information please contact Layla Bunni
Article by Layla Bunni