Overtime pay – Employment Appeal Tribunal ruling 4th November 2014

You may have noticed the recent ruling of the Employment Appeal Tribunal (EAT) under the Working Time Regulations (WTR) that non-guaranteed overtime should be factored in when calculating the amount of holiday pay that an employee is entitled to.

Before jumping to any conclusions the advice from Bethan Osborne, B

ALC HR advisor is to wait because the employers have 42 days in which to appeal to a higher court. The judge has given them leave to appeal, so it is highly likely that an appeal will happen.

The retrospective application of this ruling appears to be limited in scope as employees will potentially only be able to go back 3 months in their claims due to the Tribunal rules.

Bethan advises that councils keep robust records of authorised overtime from this month onwards in case the appeal sides with the Unite union and the workers. It is the employers who have staff on zero-hours contracts who treat additional hours as overtime who have the most to lose, and their employees who have the most to gain. It would also be prudent for councils to calculate how many hours of voluntary but authorised overtime are worked annually and what level of holiday leave or pay entitlement those extra hours are likely to generate onto staffing costs should the EAT judgement be confirmed.