Holiday pay

For nearly 20 years, workers in the UK have had a statutory right to paid annual leave under the Working Time Regulations, with an entitlement to a “week’s pay” for every week of statutory leave. But what is “a week’s pay”? Over the past 6 years, this has become one of the most vexed questions in UK employment law, as a series of test cases in the employment tribunals and appellate courts have challenged long-established principles for calculating holiday pay under the Working Time Directive.  

UCEA has commissioned a detailed legal briefing note on Holiday Pay Litigation – The Position So Far, to assist your institution in considering the impact of case law, and UK and EU legislation, on its holiday pay arrangements and practices. 

This is prompted in part by the recent case of Dudley Metropolitan Borough Council v Willetts [2017],  in which it was held that entirely voluntary overtime should be included in normal remuneration for calculating holiday pay.  UCEA is conscious that this is currently an area which is of particular interest to members, and that some are dealing with individual cases and/or with claims placed by their trade unions.

  UCEA briefing note holiday pay litigation.

In 2014 Fulton v Bear Scotland Ltd the EAT found that holiday pay should reflect non-guaranteed overtime as well as basic salary. The decision, handed down on 4 November and reported in UCEA Update 14:076, was a significant one bringing potential cost implications for employers who have staff who receive overtime earnings. 

It has implications for other non contractual payments and the UCEA Briefing for 2015 aimed to throw light on which payments might be included and how to test this.

Holiday Pay - A UCEA Briefing

Page last updated September 2017