Holiday Pay

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If you are an employee and are having problems with your holiday pay entitlement, then Blacks Solicitors’ expert Employment Law team can help.  

Employees are entitled to a minimum of 5.6 weeks’ paid holiday each year, which equates to 28 days including bank holidays.

The mechanisms which govern when holidays can be taken are usually contained within an employee’s Contract of Employment or the employer’s Staff Handbook. By contrast, the rules relating to the calculation of what an employee is entitled to be paid whilst on holiday are defined by legislation and case law.

Until around 2013 most, if not all, employers paid their employees basic pay whilst on holiday, regardless of shift premiums, overtime rates, enhancements, travel payments, and commission payments.

However, a series of statutory instruments and controversial cases have changed the landscape of holiday pay. It is now clear that employees should receive their ‘normal pay’, rather than their basic pay, whilst on holiday. This means that they ought not to miss out on the opportunity to earn overtime or commission whilst on holiday.

What this means is that, depending on individual circumstances, you should receive your normal pay during your holiday. This should be calculated as an average of pay received during an appropriate reference period prior to taking holiday, and it should take into account overtime (if that overtime is regular), commission, night shift enhancements, and travel enhancements (if they are sufficiently regular).

The case law in this area is complex however claims for unpaid or underpaid holiday pay are brought as ‘unlawful deductions from wages’.

You may retrospectively bring claims for unpaid or underpaid holiday pay, provided you can establish an historical record of having taken holiday, at intervals of not more than three months. If an employee has a gap of more than three months between holidays, the ability to recover holiday pay by counting backwards stops at that point and the chain of deductions is broken. Legislation also limits contractual holiday pay claims to the two years prior to the claim.

 

For more information about how Blacks can help you with your holiday pay entitlement, or for a free no obligation discussion, please email or call our Employment Law team today on 0113 207 0000.