Firms urged to consider ‘holiday pay’ ruling

By Harrison Drury

12 Nov 2014

Businesses owners need to have a plan in place as soon as possible to deal with potential pay claims following last week’s ‘holiday pay’ ruling, according to a leading employment lawyer.

Roger Spence, a director and head of employment law at Harrison Drury solicitors in Preston, believes businesses need to understand how the ruling will affect them legally, financially and operationally.

The decision of the Employment Appeal Tribunal (EAT) on November 4 means holiday pay should be based on a worker’s normal pay, which may include overtime if they are regularly required to work extra hours, rather than their basic salary.

An appeal against the decision is expected to be lodged and a final decision may not be made for some time. However, Roger believes businesses need to be prepared to implement the changes.

He said: “There are a number of issues for businesses here. Firstly, does the ruling impact on them currently and how will they meet the cost of back-dated pay claims. Secondly, how does it affect their working practices in future - how do they ensure they are paying their employees correctly to avoid the risk of making unlawful wage deductions, thus, leaving themselves open to potentially costly employment claims. I would advise firms to seek expert legal and financial advice on the implications of this complex ruling.”

The recent ruling only applies to the four weeks’ holiday entitlement provided for by the Working Time Directive and implemented into UK law by the Working Time Regulations 1998. It does not apply to the additional 1.6 weeks’ holiday provided for by the Working Time Regulations, for which an employer is only obliged to pay the basic rate.

This means that an employer can remunerate the two types of leave at different rates. The ruling suggests that for a full-time worker the first 20 days’ holiday entitlement will be deemed to be payable at the worker’s ‘usual’ rate, whereas the additional eight days’ entitlement can be paid at their basic rate. Workers can only make a claim if they have been underpaid for holiday within three months of lodging a claim. Any claim involving a series of underpayments will be unsuccessful if there is a gap of over three months between the underpayments.

Latest news

1

Get face-to-face to avoid the 'Gen Z stare' Karen Tems

Get face-to-face to avoid the 'Gen Z stare'

08 Oct 2026

2

Blackburn with Darwen tops young entrepreneurs table Entrepreneur Young Small Business

Blackburn with Darwen tops young entrepreneurs table

08 Oct 2026

3

Burnham tells Chorley pie shop owner ‘I’m listening’ Paul

Burnham tells Chorley pie shop owner ‘I’m listening’

07 Oct 2026

4

Heritage training for construction lecturers Img 20260907 Wa0001

Heritage training for construction lecturers

07 Oct 2026

5

Planning rules change prompts council constitution update St Annes Town Hall

Planning rules change prompts council constitution update

07 Oct 2026

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
All In One Network
LBV Website Events GraphicAll In One Network 15 Oct 2026

All In One Network

The Leisure Box, Northlight, Glen Way, Brierfield , BB9 5NH

14:00 - 16:00

Sub36 Awards 2026
Sub36 WW Logo720 16 Oct 2026

Sub36 Awards 2026

Park Hall Hotel & Spa, Chorley, PR7 5LP

18:30 - 00:30

LBV131 November/December Magazine Networking Event
LBV131 Magazine Launch Social720No Text 19 Nov 2026

LBV131 November/December Magazine Networking Event

Lancashire

08:30 - 10:30

Lancashire Business Day 2026
LBD26 WW Logo720 27 Nov 2026

Lancashire Business Day 2026

Burnley Football Club, BB10 4BX

12:00 - 17:00

Help to Grow: Management Course
Help To Grow 25 Sep 2026 - 15 Dec 2026

Help to Grow: Management Course

University of Lancashire, Preston, PR1 2HE

09:30 - 12:00

Clubhouse Business Network sponsored by Orca Finance - October 2026
Club House Padel 08 Oct 2026

Clubhouse Business Network sponsored by Orca Finance - October 2026

Clubhouse, Blackburn, BB1 3NT

14:00 - 16:00

Neurodiversity Awareness and Support Training
09 Oct 2026

Neurodiversity Awareness and Support Training

Neuro Spark Training Solutions, Burnley , BB11 2AS

09:00 - 16:00

Blackburn Darwen Youth Zone Annual Quiz
BDYZ Quiz 15 Oct 2026

Blackburn Darwen Youth Zone Annual Quiz

Accrington Stanley FC, Accrington, BB5 5BX

17:00 - 13:46

The Business Network Central and East Lancashire
LBV Website Events GraphicBusiness Network 2 15 Oct 2026 - 15 Oct 2026

The Business Network Central and East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Seriun Cyber Security Conference
Seriun 15 Oct 2026

Seriun Cyber Security Conference

Turf Moor, Burnley, BB10 4BX.

09:00 - 13:30

Preston Tech Connection Coworking Day
PTC Coworking Day long banner Oct.png.png 15 Oct 2026

Preston Tech Connection Coworking Day

Society1, 9-10 Cross Street, Preston, PR1 3LT

09:00 - 17:00

Building Brands (and workplaces) That Are Accessible For Everyone
Wyqfi3-wowjag-heczop.jpg.jpg 16 Oct 2026

Building Brands (and workplaces) That Are Accessible For Everyone

Neuro Spark Training Solutions, Burnley , BB11 2AS

09:30 - 16:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV130 Online GraphicWebsite
Subscribe now

Weekly news bulletin