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

Barons Contract Furniture announces strategic expansion with major investment in Leyland Barons Furniture expansion

Barons Contract Furniture announces strategic expansion with major investment in Leyland

19 Mar 2026

2

Pleasure Beach Resort urges support for the tourism sector as it launches its 130th season Late night at Pleasure Beach resort

Pleasure Beach Resort urges support for the tourism sector as it launches its 130th season

19 Mar 2026

3

CoolKit delivers temperature-controlled fleet for Eurofins UK Eurofins van created by Coolkit

CoolKit delivers temperature-controlled fleet for Eurofins UK

18 Mar 2026

4

Blackpool listed by government as potential City of Culture 2029 City of Culture bid

Blackpool listed by government as potential City of Culture 2029

18 Mar 2026

5

Ormskirk tour operator charters aircraft for stranded long-haul travellers across Asia Liz Reddy Head Of Product Ewan Moore Finance Director Louise Moss head of service delivery in front of chartered plane

Ormskirk tour operator charters aircraft for stranded long-haul travellers across Asia

17 Mar 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
LBV127 March/April Magazine Networking Event
Jan/Feb Networking Event - Closer up
Networking
19 Mar 2026

LBV127 March/April Magazine Networking Event

Salmesbury Hall, Preston New Road, Lancashire, PR5 0UP

08:30 - 10:30

AI & Cybersecurity Summit
AI and Cybersecurity Logo
Summit
28 Apr 2026

AI & Cybersecurity Summit

Dunkenhalgh House , Blackburn Road, Clayton Le Moors, BB5 5JP

08:30 - 11:00

Sub36 Networking - Outdoor Elements
Sub36 Outdoor Elements Logo1920x1008
Networking
29 Apr 2026

Sub36 Networking - Outdoor Elements

Outdoor Elements, Pump House Dean Wood, Trapp Lane, Burnley, BB12 7JD

09:00 - 11:00

LBV Magazine Networking Events - SAVE THE DATES
Jan/ Feb Networking Event - Talking
Networking
14 May 2026

LBV Magazine Networking Events - SAVE THE DATES

Lancashire

08:30 - 10:30

Preston Freelancer Meet-Up and Coworking Day: March
March Freelancer Square.png.png
LBV Hub Networking
19 Mar 2026 - 19 Mar 2026

Preston Freelancer Meet-Up and Coworking Day: March

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 12:00

The Business Network Central and East Lancashire
LBV Header (30).png.png
LBV Hub Networking
19 Mar 2026 - 19 Mar 2026

The Business Network Central and East Lancashire

Barton Manor, Preston, PR3 5AA

11:30 - 14:15

Exploring Debt Finance: Unlocking SME Growth
LCC Event Logos
LBV Hub Exhibitions
24 Mar 2026

Exploring Debt Finance: Unlocking SME Growth

Farleys Solicitors, 3 Mead Way, Shuttleworth Mead, Padiham, Burnley, BB12 7NG

09:00 - 12:00

Invest in Pendle: A Live Celebration Event
Northlight photograph
LBV Hub
25 Mar 2026

Invest in Pendle: A Live Celebration Event

The Leisure Box, Northlight Mill, Glen Way, Nelson, BB9 5NH

12:00 - 14:00

The Marketing Meetup Lancashire
TMM Lancs - 27th Jan.jpg.jpg
LBV Hub Networking
25 Mar 2026 - 25 Mar 2026

The Marketing Meetup Lancashire

Six Connections, One Slater Terrace, Burnley, BB11 1BU

18:00 - 20:00

The Employment Rights Act 2025: What you need to know
Logo.jpg.jpg
LBV Hub Seminars
26 Mar 2026 - 26 Mar 2026

The Employment Rights Act 2025: What you need to know

Lancaster & Morecambe College, Lancaster, LA1 1TZ

08:00 - 10:00

Lancashire Business Expo 2026
SE, Lancashire 2025.png.png
LBV Hub Exhibitions
27 Mar 2026 - 27 Mar 2026

Lancashire Business Expo 2026

Sir Tom Finney Sports Centre, Preston, PR1 2HE

09:00 - 15:00

The Ultimate Music Quiz
Logo.jpg.jpg
LBV Hub Fundraisers
27 Mar 2026 - 27 Mar 2026

The Ultimate Music Quiz

Morecambe Football Club, Morecambe, LA4 4TB

19:00 - 22:30

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 LBV124 Online Graphic
Subscribe now

Weekly news bulletin