LONDON: A British employment tribunal ruled yesterday that companies should factor in overtime when calculating workers’ holiday pay, a decision that employers’ groups warned could put some smaller firms out of business. A small group of workers had brought cases against three companies arguing that their holiday remuneration was far less than their usual pay because it did not include overtime.
The Employment Appeal Tribunal backed their claims, concluding overtime should be considered part of normal pay. Britain’s biggest union Unite said the verdict could lead to other similar claims and payouts of thousands of pounds.
“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, the union’s executive director for legal, membership and affiliated services.
It is estimated that about one-sixth of Britain’s 30 million workforce receive overtime pay and employers said the decision could lead to soaring and damaging costs. Overtime is a sensitive issue because British wages have not kept pace with inflation despite falling unemployment and economic growth.
The government said it would also review the judgement as a matter of urgency. “This ruling is damaging for businesses across the UK. Firms could be at risk of incurring significant financial losses, which could force them to close their doors altogether,” said Adam Marshall at the British Chambers of Commerce.
Reuters
