HR Fact UK: Holiday Pay Errors Still Trigger Claims

Under UK law and guidance from ACAS, holiday pay should reflect a worker’s normal remuneration, not just basic salary. This means employers must consider:

• Regular overtime (if worked consistently)
• Commission payments
• Allowances linked to the role

Failure to include these elements correctly can lead to unlawful deduction of wages claims at Employment Tribunal.

A key case reinforcing this principle is Harpur Trust v Brazel, which highlighted the importance of correctly calculating entitlement, particularly for irregular workers.

Why this matters for employers

Incorrect holiday pay can result in:

• Backdated claims (often covering multiple years)
• Financial penalties and legal costs
• Reputational damage

What employers should do

• Review how holiday pay is calculated
• Ensure payroll systems reflect “normal pay”
• Seek HR advice if unsure

Matthew Chilcott Comment

“Holiday pay is an area where many businesses think they are compliant, but small errors can quickly turn into costly claims. At Consensus HR, we help employers review their processes to ensure they are both legally compliant and practical to manage.”

👉 For support reviewing your payroll processes, visit:
🌐 www.consensushr.com

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