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

Kirkham Grammar School acquired by international group Kirkham Grammar School

Kirkham Grammar School acquired by international group

23 Jul 2026

2

Chorley footwear firm scaling up after £25k investment from NPIF II Bf612b44 06ed 4229 A435 082f764cc31a

Chorley footwear firm scaling up after £25k investment from NPIF II

23 Jul 2026

3

County Council crowned top local authority for apprenticeships in national table Ot Apprentice Claire Graves

County Council crowned top local authority for apprenticeships in national table

23 Jul 2026

4

Heysham nuclear plant to generate until at least March 2030 Heysham 2 Power Station

Heysham nuclear plant to generate until at least March 2030

23 Jul 2026

5

Brysdales making space for the future Clp1867small

Brysdales making space for the future

23 Jul 2026

Blackburn College (July-Aug 26)
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
LBV130 September/October Magazine Networking Event
Jan/Feb Networking Event - Entrance
Networking
17 Sep 2026

LBV130 September/October Magazine Networking Event

The Beehive Blackburn, Shadsworth Business Park, BB1 2QS

08:30 - 10:30

Built Environment Conference 2026
BEC Listing
Networking
24 Sep 2026

Built Environment Conference 2026

EG On The Move, Waterside Head Office, Blackburn, BB1 2FA

08:30 - 13:00

Sub36 Awards 2026
Awards
16 Oct 2026

Sub36 Awards 2026

Park Hall Hotel & Spa , Chorley

18:00 - 00:00

LBV131 November/December Magazine Networking Event
Jan/ Feb Networking Event - Talking
Networking
19 Nov 2026

LBV131 November/December Magazine Networking Event

Lancashire

08:30 - 10:30

Lancashire Business Day 2026
LBD Listing
Networking
27 Nov 2026

Lancashire Business Day 2026

Burnley Football Club, BB10 4BX

12:00 - 17:00

Preston Tech Connection Coworking Day at Society1
PTC coworking day FB 900 Square.png.png
LBV Hub Networking
23 Jul 2026

Preston Tech Connection Coworking Day at Society1

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 12:00

The AI Lab: Marketing Multiplier
LBV Hub Roundtables
31 Jul 2026

The AI Lab: Marketing Multiplier

Door4, Burnley Wharf, Manchester Road, Burnley, BB11 1JG

09:00 - 11:30

Chamber Breakfast Networking – August
Logo.jpg.jpg
LBV Hub Networking
04 Aug 2026

Chamber Breakfast Networking – August

Morecambe Golf Club, Morecambe, LA4 6AJ

08:00 - 10:00

Morecombe Bay Walk
Morecambe-25-web-gallery4.jpg.jpg
LBV Hub Fundraisers
08 Aug 2026

Morecombe Bay Walk

Arnside, Carnforth, LA5 0HD

13:00 - 18:00

The Ultimate Network
Logo.jpg.jpg
LBV Hub Networking
13 Aug 2026

The Ultimate Network

Garner Hotel , Preston, PR5 0UL

16:00 - 18:00

Mind Over Mountain: Brunch at Ivory Tower
mind-over-mountain-complete.jpg.jpg
LBV Hub Fundraisers
11 Sep 2026

Mind Over Mountain: Brunch at Ivory Tower

Ivory Tower, Preston, PR1 2NL

12:30 - 16:30

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