Employees represented by lawyers from Minster Law and Thompsons have secured a groundbreaking Employment Appeal Tribunal (EAT) decision over whether pay for overtime should be including in holiday pay.
BGL Group-owned Minster Law and trade union specialists Thompsons were acting for three groups of employees who claimed they were required to work overtime, and so should be compensated for this when on holiday.
The workers successfully defended their claim against an appeal brought by Scottish maintenance provider Bear Scotland, which was joined to similar appeals by fellow services companies Hertel and Amec. The decision is expected to lead to a significant number of claims by trade unions on behalf of their members.
Bear Scotland was represented by DLA Piper partner Kate Hodgkiss, instructing Hastie Stables’ Brian Napier QC. Napier also appeared for Hertel and Amec, alongside Littleton Chambers’ John Bowers QC for Hertel and Blackstone Chambers’ Dinah Rose QC for Amec. Both Hertel and Amec turned to Squire Patton Boggs partner Andrew Stones.
The EAT found that article 7 of the EU’s Working Time Directive required that workers should be paid “normal remuneration” during their holidays – in other words their average pay, rather than their basic wages or salary. Mr Justice Langstaff also ruled that taxable remuneration for time pend travelling to work should also be included as normal remuneration.
However a cross-appeal by Hertel and Amec succeeded. Langstaff J ruled that any claims for unlawful deductions must be made within three months of an underpayment, which means employees will not be able to claim for all underpaid leave.
In a statement, DLA’s Hodgkiss said the decision would lead to increased holiday pay liability for many employers, but Langstaff J’s ruling on the limitation period meant “the impact for employers is significantly less devastating than feared”.
She added: “Unions have already filed a substantial number of claims for backdated holiday pay in anticipation of this judgment. The decision of the EAT may, however, provide an incentive to settle claims, as the potential for back pay is now limited.
“In the longer term, employers will need to look at how they structure working arrangements in order to minimise the increased liability for holiday pay.”
The legal line-up:
For the appellant, Bear Scotland
Hastie Stables’ Brian Napier QC and Littleton Chambers’ Niran de Silva, instructed by DLA Piper partner Kate Hodgkiss and associate Euan Bruce
For the appellant, Hertel
Littleton Chambers’ John Bowers QC and Hastie Stables’ Brian Napier QC, instructed by Squire Patton Boggs partner Andrew Stones
For the appellant, Amec
Blackstone Chambers’ Dinah Rose QC, Hastie Stables’ Brian Napier QC and Blackstone Chambers’ Tom Richards, instructed by Squire Patton Boggs partner Andrew Stones
For the respondents, David Fulton and others
9 St John Street’s Edward Morgan, instructed by Minster Law associate David Scott
For the respondents, Mr K Woods and others and Mr Law and others (members of Unite)
Old Square Chambers’ Michael Ford QC and Mark Whitcombe, instructed by Thompsons Solicitors associate Alys Cunningham
For the intervener, the Secretary of State for Business, Innovation and Skills
Fountain Court Chambers’ Adam Tolley QC, instructed by the Treasury Solicitor