10-17_ARENA_SPRING2015_Arena_A5 11/02/2015 09:14 Page 2 • HOLIDAY PAY • KNOW YOUR RIGHTS • HOLIDAY PAY • KNOW YOUR r e holiday pay on Fair its way after ruling ay pay – s coverage about holid ns has been a lot of pres There has imposed restrictio ws but the Coalition it’s good ne In a nutshell... Calculating holidays Q Q What’s going on with holiday pay? Recent court rulings have determined that holiday pay should be based on normal pay, not just basic contractual pay. These rulings are limited to the first four weeks' leave, in line with the provisions of the Working Time Directive. The decisions do not cover the additional 1.6 weeks granted through the UK regulations or any additional contractual holiday entitlement. The Employment Appeal Tribunal has placed significant restrictions and strict limits on the ability to make claims over the previous underpayment of holiday pay. As a result, the majority of members are unlikely to have a claim for substantial backpay. Because of the legal complexities Usdaw’s main aim is to achieve normal pay for all future leave, but where a member may have a claim for significant backpay, legal assistance will be available via the normal channels. hould Workers s nalised not be pe holidays for taking 10 arena What’s the background to this? The European Working Time Directive (WTD) dictates that all workers are entitled to four weeks’ annual leave but does not specify the rate at which this should be paid. The WTD is implemented in the UK by the Working Time Regulations (WTR). Under the WTR, workers are entitled to the European four weeks' paid annual leave and also an additional 1.6 weeks’ domestic annual leave. Many employees may also be entitled to additional contractual leave often negotiated by their trade union. The calculation of a week’s pay is governed by the Employment Rights Act 1996 which is generally basic contractual pay, excluding elements such as non-contractual overtime and commission. So, for example, a worker could be contracted to work 16 hours a week yet work regular overtime taking their ‘normal’ weekly hours to 20 hours a week. However, when the employee took holidays they would only be paid for 16 hours – their contractual hours and leaving the employee out of pocket. This is not the case for all employees as some employers do use a formula for calculating holiday pay that does take into account average hours often based on the previous P60 earnings. (Your P60 is a statement of how many hours you work, your wages and your tax and national insurance payments over the tax year. It is issued to all workers by their employer every year usually in April or May).