Holiday pay continues to be a source of confusion for employers!
As a reminder, when it comes to holiday pay, essentially the background to the original legislation was to ensure holiday was taken, from a health and safety stance. Hence the trend in recent cases is to encourage workers to take their holiday, by ensuring they are no worse off financially during that time.
The latest case involved tradespeople and confirms that voluntary overtime, which is normally worked, counts as ‘normal remuneration’ for the purposes of calculating holiday pay (which in this matter included standby pay and call out allowances).
In short, if a worker would normally have earned the monies had they had NOT taken leave, then the employer is most likely expected to ensure any holiday pay reflects this.
A quick reminder that such decisions apply only to the four weeks’ annual leave entitlement under the Working Time Directive (the additional 1.6 weeks or contractual holiday are not automatically included). However, in reality employers often apply the same approach across all leave, for administrative reasons.
As always each situation needs to be decided on its merits. If we can assist further please get in touch.