What you need to know about holiday pay

Posted: Tuesday July 26 2016

By: Abbie Coleman

What you need to know about holiday pay

By Marie Walsh, Consilia Legal

So here we all are about to go or going on our summer holidays.

Did you know however that there has been a lot of action this year in the courts relating to holiday pay and its calculation.

Following the Employment Appeal Tribunal’s decision in a well reported case named Bear Scotland, it is now the case that 4 weeks of an employee’s statutory holiday must be calculated in a certain way and must now include:

“Payments linked intrinsically to the performance of the tasks which the worker is required to carry out under their contract of employment.;


“Payments which relate to the worker’s professional and personal status.”

Marie and childrenSo if for example you normally receive pay which is enhanced by commissions and regular overtime but when you take annual leave you receive only basic pay you may want to speak to your employer about the precise calculation of your holiday pay.    Alternatively, if you are an employer you would be advised to speak to pay roll in order to ensure that all relevant payments are being included in the calculation.

Recent cases have decided that such things such as commissions, bonus payments, certain types of overtime including non- guaranteed, radius allowances, productivity and attendance bonus’, Standby and emergency call-out payments and acting up supplements should be included in the holiday pay calculation.

Tips and service charges remains a moot point

The issue here is whether a worker is put off taking their holidays because of a financial detriment if they do.  The Working Time Regulations are there to ensure we all have a good period of rest and to penalise workers for taking holiday goes against its objective.

If you are an employee or an employer and need further advice in this area please contact us here are Consilia Legal and remember in the meantime to have a great holiday.