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

REVEALED: Sub36 Awards winners 2026 S36 Winners

REVEALED: Sub36 Awards winners 2026

16 Oct 2026

2

Three in a row for Lancaster accountants at national awards The Team At Ics Celebrating Their Win

Three in a row for Lancaster accountants at national awards

15 Oct 2026

3

Victorian Plumbing records 11 per cent revenue increase Victorian Plumbing staff

Victorian Plumbing records 11 per cent revenue increase

15 Oct 2026

4

Preparation matters for MTD changes Bilal Piperdy

Preparation matters for MTD changes

15 Oct 2026

5

Training for scheme to boost number of women in technology Aerial photo of Lancaster University Campus

Training for scheme to boost number of women in technology

15 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
LBV131 November/December Magazine Networking Event
LBV131 Magazine Launch Social720No Text 19 Nov 2026

LBV131 November/December Magazine Networking Event

The Landmark, School Lane, Burnley, BB11 1UF

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

St Catherine's Skydive, October
Skydive 17 Oct 2026

St Catherine's Skydive, October

Black Knight Parachute Centre, Lancaster, LA2 0DY

09:00 - 17:00

Commercial Planning Application workshop
Commercial Planning Workshop 20 Oct 2026

Commercial Planning Application workshop

Online, Accrington , BB5 0PF

12:00 - 13:00

They’ve Already Decided About You – Sales Geek Sales Club: how buyers judge you before you speak – and what to do about it
Lancaster And Morecambe Logo 1 21 Oct 2026

They’ve Already Decided About You – Sales Geek Sales Club: how buyers judge you before you speak – and what to do about it

Lancaster & Morecambe College, Lancaster, LA1 2TZ

08:00 - 10:00

Mock Tribunal - step inside an employment tribunal… without the risk
LBV Website Events GraphicMock Tribunal 21 Oct 2026

Mock Tribunal - step inside an employment tribunal… without the risk

Online, Preston, PR1 3JD

09:30 - 12:30

Preston Freelancer Meet-Up: October
Freelance Meet Up 22 Oct 2026

Preston Freelancer Meet-Up: October

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

10:00 - 12:00

North West Business Expo
LBV Website Events GraphicBusiness Expo 1 23 Oct 2026

North West Business Expo

Toughsheet Stadium , Bolton, BL6 6JW

09:00 - 15:00

Girlie Night Out
Lancaster And Morecambe Logo 1 23 Oct 2026

Girlie Night Out

Lancaster Brewery, Lancaster, LA1 3LA

19:00 - 23:00

Lancashire Finance Leaders Forum: The Autumn Budget in Focus
ian-UmTFcwHLPC0-unsplash.jpg.jpg 29 Oct 2026

Lancashire Finance Leaders Forum: The Autumn Budget in Focus

Farington Lodge Hotel, Stanifield Lane, PR25 4QR

08:00 - 10:00

The PM+M Autumn Budget seminar - East Lancashire
Autumn Budget 2026 LBV 29 Oct 2026

The PM+M Autumn Budget seminar - East Lancashire

Blackburn Rovers Football Club (Premier Suite), Blackburn, BB2 4JF

08:00 - 10:30

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 LBV130 Online GraphicWebsite
Subscribe now

Weekly news bulletin