Press coverage and advertising campaigns launched by law firms seeking to act for employees are also increasing public awareness. We have already been asked to advise both employers and employees on this issue. These claims arise from a decision of the Court of Justice of the European Union (CJEU) effectively ordering that an employee whose pay normally included commission payments should have had the amount of his commission taken into account when calculating his holiday pay. On 31 July and 1 August the Employment Appeal Tribunal (EAT) heard two conjoined appeals, Wood v Hertel (UK) Ltd and Fulton v Bear Scotland Limited. These deal with other additional payments which employees/workers commonly receive which are not generally included in holiday pay. Such payments include:
- overtime payments
- incentive bonus arrangements (eg attendance bonuses or shift allowances)
- stand by and emergency call out payments
If employees receive payments beyond basic pay during their employment but only receive basic pay when on holiday then they may have a claim. There is a risk that claims, covering underpayment and interest, may go back to 1998. As such, liabilities may be substantial.
It is likely that the outcome of the current appeals to the EAT will result in these cases being remitted to the CJEU and/or there being further appeals.
There are various options open to employers and employees, in terms of dealing with this issue, and strategies should be individually tailored and well thought out. Practitioners should also bear in mind the issues set out above when advising in relation to Settlement Agreements which will, in most cases, amount to a waiver of the potential claims referred to above. If you would like to discuss this issue please contact us on the details below.