Employers must take account of overtime when calculating holiday allowances for staff, according to a ruling by the Supreme Court. The ruling came in a case brought by the Police Service of Northern Ireland, which must now pay at least £30m in back pay to officers and civilian employees. The dispute arose after a change in rules meant that overtime and additional payments should be factored into holiday pay rates. Employment specialists warn that employers will no longer be able to use technical arguments to limit their liability for underpaid holiday pay claims. Jo Moseley, a member of Irwin Mitchell’s employment team, said: “Today’s ruling is of major significance and has the potential to cost UK businesses millions of pounds.”
Our HR comment: Employers must account for overtime in holiday pay calculations | Consensus HR – Herts, Beds
Matthew P Chilcott, FCIPD, ACEL, Owner of Consensus HR comments: “This is an interesting case mentioned today in relation to when calculating and employees holiday pay and ensuring that overtime is also included. Pay is an area we always get calls about and especially when a member of the team has left the business and is an area that an employee ca go to an Employment Tribunal from day one of employment if they believe they have monies owed to them. This is called ‘Unauthorised deduction of wages’ and is covered under the Employment Rights Act 1996 section 13 – 13.Right not to suffer unauthorised deductions.
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