In Neal v Freightliner Ltd the terms and conditions of a freight worker stated that he was expected to work a basic 35 hours per week made up of seven-hour shifts. He could be required to work overtime when necessary. His employment was also governed by a local collective agreement which provided for a nine-hour shift pattern. In reality, the freight worker was largely working shifts of 8.5 or 9 hours and on occasion 12 hours, in accordance with a weekly roster. However, his holiday pay was calculated on the basis of his basic salary and did not take into account the additional hours he was working in line with the roster.
The law says that for the purposes of calculating holiday pay, where a worker’s pay varies from week to week, their weekly pay is averaged over a 12-week reference period. The law currently says that where the worker’s pay in this period includes any overtime paid at a higher rate, this should be reduced to the worker’s basic rate of pay for the purposes of the calculation. The law also says that any hours worked over and above the basic hours the worker is required to work before receiving overtime should be discounted for the purposes of the calculation.
The tribunal’s decision, in line with the ECJ’s judgment in Williams, was that the freight worker’s holiday pay should not have been based just on his basic salary. It held that the law should be read so as to disapply the above current requirements for calculating average weekly pay if holiday pay is to be calculated in line with the relevant European law. As the overtime worked by the freight worker amounted to performance of tasks he was required to carry out under his contract, this should have been taken into account. The same principle applied for the shift premium the freight worker was paid for some of these additional hours.
Commentary
Following the decision in Neal v Freightliner Ltd it seems clear that employers should take into account all the hours employees are actually working and all the payments they are actually receiving when calculating holiday pay, not just their basic salary. If these extra payments are intrinsically linked to the performance of tasks they are required to carry out under their contract they must be taken into account for the purposes of holiday pay.
For more information or advice on this issue, or holiday pay generally, please contact Doug Mullen on 0121 212 7432 or douglas.mullen@anthonycollins.com.
Hilary Homfray joins Anthony Collins Solicitors after working for Birmingham City Council for 14 years. With more than 60,000 properties, she was kept busy!
The use of large up-front fees and disproportionate deposits has already resulted in significant cost consequences for one care provider.
The government announced on 16 May that it will provide a fund of £400m to cover the costs of removal and replacement of cladding to high rise residential blocks which have failed tests.
Whilst some people are under the impression that preparing a Lasting Power of Attorney (LPA) is simply a case of completing a form and ticking a few boxes, it is about far more than this.
A big fear for some people facing divorce and the inevitable carving up of the matrimonial assets. They seek assurances that such assets will be “ring-fenced” and retained for them.
Thinking about the legal status of being a cohabitant probably isn’t at the top of the ‘to do’ list.
When an individual is thinking about making a gift to another individual, consideration needs to be given to the Potentially Exempt Transfer (PET) trap.
We are now only a few weeks away from the biggest change to data protection laws in over 20 years. Are you compliant?
The tragedy, in this case, is that there were options readily available to the midwives that they could have used. This was not a case of having to go above and beyond.
Arising from the recent Family Division announcement, people who think they are legally divorced may in fact still be married.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.