The Retail Motor Industry Federation is concerned about today’s ruling from the Employment Appeal Tribunals (EAT) on voluntary overtime.
The ruling outlines whether or not ‘voluntary’ overtime should be used when calculating employee’s holiday pay.
This follows related developments earlier this year in Lock v British Gas on the inclusion of commission in holiday pay.
RMI Director Sue Robinson comments, “An employee’s holiday pay is currently calculated on their basic pay, but workers and trade unions have argued that overtime and commission payments should be included, due to the fact that in some business sectors they can form a large proportion of total ‘take-home’ pay.
“If the EAT rule in favour of the employees, then it is anticipated that up to 5 million people could be entitled to claim for extra holiday pay that, in some cases, may stretch back to 1998; when the UK implemented the Working Time Regulations.
“For businesses this could run into hundreds of millions of pounds in backdated pay for business to find. The issue has pitted the workers and unions, against employers and the coalition government; who have already argued that overtime should not be used in holiday pay calculations.
“Any ruling is likely to be appealed against, whatever the outcome, meaning a definitive decision could be some time away yet.”
NOTES TO EDITORS:
The Retail Motor Industry represents the interests of operators in England, Wales, Northern Ireland and the Isle of Man providing sales and services to motorists and businesses. The RMI has a formal association with the independent Scottish Motor Trade Association which represents the retail motor industry in Scotland.