RMIF Members who have been keeping an eye on Employment Law developments over the last few years will know about the changes relating to Holiday Pay. A number of cases have, over the last few years, clarified that payments such as commissions and overtime, where they form part of the employee’s normal remuneration, should be included in calculating holiday pay. Previously employers could often argue that basic pay only was satisfactory.
A recent case at the Court of Appeal; Flowers v East of England Ambulance Trust has confirmed that voluntary overtime should be taken into account when calculating holiday pay, provided it is sufficiently regular and settled for payments to be considered to amount to “normal” remuneration. In the case ambulance crew worked voluntary overtime. It was entirely voluntary i.e. they were free to choose whether or not to do it. Lord Justice Bean, delivering the lead Judgment, agreed that on the facts the overtime was sufficiently regular to be normal remuneration. It follows that, where there is very sporadic or occasional voluntary overtime, such payments could be distinguished and not included in holiday pay.
Conclusion
This ruling is not unexpected given the direction in which the caselaw was moving. Note that the developments on holiday pay only strictly apply to the 20 days of EU leave, not the additional 8 UK days, albeit given the complexity in distinguishing between the two types of leave, many employers pay all holiday at the same higher rate.
Solicitor
Motor Industry Legal Services
Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.
