Time for Lancashire’s business owners to consider ‘holiday pay’ ruling

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Business owners need to have a plan in place as soon as possible to deal with potential pay claims following last week’s ‘holiday pay’ ruling, according to a leading employment lawyer.

Roger Spence, a director and head of employment law at Harrison Drury solicitors in Preston, believes businesses need to understand how the ruling will affect them legally, financially and operationally.

The decision of the Employment Appeal Tribunal (EAT) on November 4 means holiday pay should be based on a worker’s normal pay, which may include overtime if they are regularly required to work extra hours, rather than their basic salary.

An appeal against the decision is expected to be lodged and a final decision may not be made for some time. However, Roger believes businesses need to be prepared to implement the changes.

He said: “There are a number of issues for businesses here.

“Firstly, does the ruling impact on them currently and how will they meet the cost of back-dated pay claims.

“Secondly, how does it affect their working practices in future – how do they ensure they are paying their employees correctly to avoid the risk of making unlawful wage deductions, thus, leaving themselves open to potentially costly employment claims.”