Wragge Lawrence Graham & Co

UK 200 2014 position: 28

Holiday pay and overtime — implications of Freightliner decision for pension schemes

In Neal v Freightliner Ltd, the Employment Tribunal (ET) looked at the payment of overtime during a worker’s statutory holiday leave. Previously only guaranteed contractual overtime has been included in holiday pay calculations. However, the ET decided that non-guaranteed overtime (whether compulsory or voluntary) should also be included.

Under the Working Time Directive (WTD), a worker is entitled to four weeks of paid annual leave. The Working Time Regulations 1998 (WTR) implement the WTD in the UK. The British Airways plc v Williams case established that a worker must be no worse off financially during annual leave than if he/she had continued working. So, under EU law, workers are entitled to receive their ‘normal remuneration’ when taking statutory holiday leave.

The traditional view is that guaranteed contractual overtime (obligatory on the part of the employer and the worker) counts towards ‘normal remuneration’. Non-guaranteed overtime does not count for workers with normal contractual hours. Statutory holiday pay has therefore traditionally been calculated by reference to contractual hours only…

If you are registered and logged in to the site, click on the link below to read the rest of the Wragge & Co briefing. If not, please register or sign in with your details below.

Sign in or Register to continue reading this article

Sign in


It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer


Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.


Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.


Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Wragge Lawrence Graham & Co

View more briefings from Wragge Lawrence Graham & Co

Analysis from The Lawyer

  • Paul Wilson

    Regional: attempted merger

    Alliances, failed and successful, are the story of the year outside London

  • Belinda Bradberry

    Interior designs

    Polish up your retention policy - private practice lawyers are increasingly eyeing in-house roles

View more analysis from The Lawyer


2 Snowhill
B4 6WR

Turnover (£m): 121.16
No. of lawyers: 440