Holiday Pay: the EAT rules on what you should be paying

You may remember from our update in September that the ECJ had ruled that holiday pay should not be limited to basic salary but must correspond to “normal numeration”. In practice, this would include payments such as commission and overtime, but the issue of whether or not voluntary overtime was under appeal.

The Employment Appeal Tribunal handed down its judgement this morning in Bear Scotland v Fulton ruling that non-guaranteed overtime should be taken into account when holiday pay is calculated. In addition, travel time payments which exceed expenses incurred (therefore amounting to additional taxable remuneration) should also be reflected when calculating holiday pay.

If there is any good news for employers it is that the right only applies to the basic 4 weeks’ (or 20 days) leave granted under the Working Time Directive and not the extra 1.6 weeks under the Working Time Regulations.

The EAT also confirmed our advice in our September update; claims for arrears of holiday pay will be out of time if there has been a break of more than 3 months between successive underpayments.

In a further development the Government has announced today that it is setting up a task force to assess the possible impact of the ruling. Consisting of government departments and business representative groups, it will discuss how the impact can be limited.

Whilst it’s not yet clear whether or not arrears going back as far as 1998 can be claimed, or what the outcome or recommendations of the Government’s task force’s assessment will be, we strongly recommend you do what you can now to limit your liability and speak with us about how you might break the series of unlawful deductions. Do something now before one or more of your workers bring a claim to the Employment Tribunal for unpaid holidays.

The Cost del Crammond

Two weeks ago, I met a criminal. Last week I met another. Nothing surprising in that you might think. I am a solicitor after all. But the last time I did any criminal defence work was at least 25 years ago. And this was in leafy Cramond for Heaven’s sake. Neither of these crooks has yet been charged and convicted and I hope no wise prosecutor would ever regard it as in the public interest to prosecute either of them. Certainly, I won’t be grassing them up by naming them here. Sadly, however, both of them are, nonetheless, ‘bang to rights’.

Working from home as I write, I’ve just encountered a higher end crook who might be regarded as representing an organised crime gang. Ironically, he’s tampering with our burglar alarm system. We’ve just had a cup of tea. Charming bloke but then Crimewatch says all the best conmen are. A line from that 1972 Slade smash drifts into my head

Mamma, mama, weer all crazee now….

Because my particular parcel of rogues consists of an electrician, a house painter (both great tradesmen whose one man bands deliver exemplary results on time and on budget) and a major UK alarm company (again professional in everything they have done). All of the jobs run into several hundred pounds. Had they done the work before Friday 13th June (even Freddie Kruger couldn’t make this up), they, unlike Slade, would not be risking a criminal record.

Their crimes? The first two gave me nothing in writing at all, nor did I need them to, and did the work at a time that suited them. There was no urgency. The third set out the contract terms clearly in writing (perfectly acceptable to me) but did not tell me about my new off-premises cancellation rights. Even if they had, and this is all getting a bit too metaphysical for me, they did not follow the precise and mandatory requirements in relation to confirming my cancellation rights as set out in the Consumer Contracts (Information Cancellation and Additional Charges) Regulations 2013. Clearly, our benighted legislators do not feel any UK business can be trusted with such weighty drafting (as in ‘If you want to, you can contact us and cancel before [work out the date, say,  17th November 2014’).

All three have therefore committed an offence under Regulation 19. What makes this even worse is that, even if I did not have the new cancellation rights (and in many cases I won’t e.g. with bespoke goods made to my order) or had them but have now  lost them (also quite common e.g. once the paint goes on my house, it becomes, get this, ‘inseparably mixed’), they’re all still crooks for not telling me that on paper or, to quote Nanny, ‘in some other durable form’.

Now don’t get me wrong. I’m a consumer too and was involved professionally in work a few years ago for a trade federation seeking to target cowboy builders. I know there are bad people out there who prey on the vulnerable. I also realise businesses are, as a matter of policy, usually regarded as the better risk-bearers. Whisper this too but, for all its faults, I’m a fan of the EU, whose fingerprints are sadly all over this nonsense. Has no-one heard of balance or commonsense? Of course, there are bad apples out there but is criminalising the, I guess, 90%+ of good ones really the way to go? As my lovely Canadian Aunty Ruby always says,

Steve, the only thing about commonsense is it sure ain’t common….

The rumour mill says the UK suddenly woke up to the need to legislate by 13th June, and panicked.

The simple point, though, is anyone who sells goods or services to consumers really needs to take some advice on their contract terms (even if, in the hundred years they and their family business have been trading, they and their customers have never felt the need to have anything in writing) as one by-product of this rather poor joke is thousands of oral contracts that are made every day will now require to be put in writing. Fine for the larger concerns but surely a little OTT for Bloggs & Co on Acacia Avenue.