UNITE Will Not Appeal EAT's Decision on Holiday Pay and Overtime

In the recent case of Bear Scotland Ltd. and Others v Fulton and Others, the Employment Appeal Tribunal (EAT) ruled that employers should include ‘non-guaranteed’ overtime that is routinely worked when calculating a worker's holiday pay.

However, the EAT held that this only applies to the 20 days’ annual leave entitlement guaranteed under the Working Time Directive (WTD), not the additional eight days’ entitlement granted under Regulation 13A of the Working Time Regulations 1998.

In addition, the EAT ruled that claims for unlawful deductions from holiday pay are subject to the three-month limitation period for bringing claims laid down by the Employment Rights Act 1996. This has the effect of limiting any retrospective liability on the part of employers, particularly as the EAT ruled that additional leave under Regulation 13A should be ‘the last to be agreed upon during the course of a leave year’.

The EAT granted the parties leave to appeal to the Court of Appeal on all points on which they lost, but doubted whether an appeal against its main finding as regards guaranteed overtime and normal remuneration would succeed.

The trade union Unite, which acted for the claimants, was expected to appeal against the decision on limitations on retrospective claims. However, it has announced in Workplace Savings and Benefits that it does not intend to do so.

That is unlikely to be the end of the matter as other claims will most likely be heard that could change the situation. However, for the time being at least, employers should include non-guaranteed overtime when calculating holiday pay, as well as other payments which constitute a worker's normal remuneration.