THE Employment Appeal Tribunal has ruled that ‘non-guaranteed’ overtime must be taken into account when calculating holiday pay.

This represents a potentially major extra expense for employers, both ‘retrospective’ and going forward, but the definitive position, especially as to how far back in time claims can be made, won’t be known until appeals have been heard in the higher courts.

The Government has already appointed a task force to review the impact.

Employers could sensibly assess their possible liability to past unpaid holiday pay, and take into account holiday patterns before the end of their leave year.

They should also consider how to calculate holiday pay going forward if the decision is upheld, and review what practical steps may be possible to reduce overtime generally.

For advice on how this may affect your business please contact Kirstie Johnson, Lamb Brooks employment specialist, on 01256 305574 or email her at kirstie.johnson@lambbrooks.com.