Holiday pay ruling may affect millions of workers

A closely-watched ruling will later determine whether millions of workers are entitled to claim for overtime to be included in holiday pay.

Across the UK, employers could be liable for billions of pounds in backdated pay, some estimates suggest.

Currently, only basic pay counts when calculating holiday pay.

Any ruling is likely to be appealed against, whatever the outcome, meaning a final decision could be years away.

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And then the Tax Man follows up

Update

Workers have won a ground-breaking case at the Employment Appeal Tribunal to include overtime in holiday pay.

This means some people working overtime could claim for additional holiday pay. Currently, only basic pay counts when calculating holiday pay.

The tribunal also ruled that workers can make backdated claims, but only for a limited period.

However, the ruling could be referred to the Court of Appeal, meaning a final decision may be years away.

The ruling has widespread implications for companies where staff are required to do overtime as a regular part of their job. Lawyers said the tribunal was not clear on whether the ruling applied to workers doing voluntary overtime.

But Caspar Glyn, a barrister specialising in employment law, told the BBC that the ruling effectively meant that: "Normal is pay is normal pay and that should be paid when you're on holiday". Even though this was not spelt out in the ruling, this referred not just to compulsory overtime but to any overtime that is worked on a regular basis, he said.

"Up until now, some workers who are required to do overtime have been penalised for taking the time off they are entitled to," said Howard Beckett of the Unite union.

"This ruling not only secures justice for our members who were short changed, but means employers have got to get their house in order."