Employment Appeal Tribunal Decision Changes Way in Which Holiday Pay Will be Calculated

A recent decision of the Employment Tribunal means that all hours worked in overtime will need to be taken into account when calculating an employee’s holiday pay. Previously, holiday pay was calculated only on normal working hours, no matter how many additional hours an employee may have worked. Holiday pay will now have to be increased if an employee works additional hours.

Permission has been granted for an appeal, but it seems unlikely that the new holiday pay concept will be wholly overturned. Charities whose employees work overtime need to take this change into account when calculating holiday pay going forward.

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