The recent ruling from the Employment Appeal Tribunal (EAT) which means overtime should be taken into account when calculating holiday pay “must be challenged,” according to business chiefs.
The Confederation of British Industry described the ruling as a “real blow” and is concerned that the ruling could lead to significant financial pressure and possible collapse for many businesses.
There are currently around five million people in the UK who work compulsory or voluntary overtime. At present, only basic pay counts towards holiday pay, but under the new ruling, those who work regular overtime could claim for additional holiday pay.
Workers will also be able to backdate claims by three months, but not as far back as 1998 as some employers had feared.
“These cases are creating major uncertainty for businesses and impacting on investment and resourcing decisions. This judgment must be challenged. We need the UK Government to step up its defence of the current UK law, and use its powers to limit any retrospective liability that firms may face." says CBI director-general John Cridland.
However, Paul Kenny, general secretary of the GMB union, said: "This judgment ensures that workers are properly paid for holidays and is a good and welcome result.”
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