Policy News Journal - 2014-15

worker receives pay comparable to normal pay whilst on holiday, and is not deterred from taking leave by financial considerations, cf. the pilots' case, Williams v British Airways .

The case leaves open the question of how best to ensure that the objectives of the directive are met, but did not consider whether employers might require workers to take their full entitlement to leave, thereby ensuring that they are not 'deterred' from taking leave, and it may be that some form of 'rolling-up' of commission on an averaging basis might be the best way forward. Practitioners may wish to consider advising clients to review their contractual leave arrangements with a view to ensuring that commission or other relevant variable payments are factored into holiday pay due under the Directive. Any amendments to the Working Time Regulations to implement the effect of this judgment may take some time.

Lessons from 13 recent cases on holiday pay

4 July 2014

A useful analysis has emerged of thirteen recent judgments on employees’ holiday pay rights

This report from Personnel Today gives helpful guidance on the lessons to be learnt from thirteen recent decisions.

Government pressed to intervene on holiday pay ruling

18 July 2014

The CBI and others are calling on the government to stop the recent European Court of Justice (ECJ) ruling from applying in the UK.

We are grateful to Workplace Law for this summary:

In the UK, holiday pay is currently calculated on the basis of a ‘week’s pay’ – based on basic salary and excluding payments such as working allowances, expenses, overtime, commission and bonus payments, all of which refer to specific work done by someone while performing their duties. However, a recent ECJ ruling has determined that holiday pay must include an allowance for commission that an employee could have earned if at work. Businesses are now concerned that if liabilities on holiday pay are backdated, they could potentially face bills of millions of pounds. Following the judgment by the ECJ, the Confederation of British Industry (CBI) has revealed that it has been informed by a number of organisations that backdated claims could force their businesses into insolvency, which would of course result in a large number of job losses across the UK. Commenting, Katja Hall, CBI Deputy Director-General, said:“Backdated claims on holiday pay could lead to bills of millions of pounds for each business, and ultimately threaten their very existence.” “Businesses that have done the right thing and fully complied with UK law suddenly face the threat of substantial additional costs. And the companies most at risk are in vital sectors for our economy, such as manufacturing, construction and civil engineering.” The ECJ’s ruling in the Lock v. British Gas Trading Ltd case means that British workers could have the right to claim for holiday pay and overtime they are owed, going back as far as 1998 under the Working Time Directive, or to an employee’s start date with a company. Research by EEF, the manufacturers’ organisation, estimated that an SME in the manufacturing sector with a £30m annual revenue can expect to face a bill of £2.5m, with National Insurance and pension contributions adding on a potential £250,000.

Explaining the outrage at the decision, Katja Hall stated:“Moving the legal goalposts in this way is unacceptable. Although most businesses believe we are better off in a reformed EU,

CIPP Policy News Journal

08/04/2015, Page 88 of 521

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