Landmark ruling sets precedent on holiday pay calculations

By Linder Myers

06 Nov 2014

Businesses who operate with workers on a regular overtime and commission basis should take heed of a landmark decision by the Employment Appeal Tribunal which ruled that UK regulations were out of line with EU law on 4th November 2014.

The tribunal involved employees from engineering firm Amec, industrial services business Hertel and roads maintenance company Bear Scotland and ruled that workers paid regular overtime and commission rates should receive more than their basic rate of pay during annual leave.

Alan Lewis, head of employment at Linder Myers Solicitors in Lancashire comments: “The decision is significant and means that businesses will have to start taking into account employees’ overall remuneration when calculating holiday pay and not just pay workers their basic rate during annual leave in line with the UKs Working Time Regulations Act 1998.

"The case will have significant ramifications to those employees whose pay is significantly enhanced by commission and bonuses, as well as those employers that rely upon their employees working regular overtime. The decision also has a retrospective effect which has caused great anxiety amongst business owners.

“Many businesses are worried that they could face significant claims for backdated holiday pay, which the CBI has estimated could run into “billions of pounds”. The Government has set up a task force to address the significant implications of the case and the exposure businesses now face to costly tribunal claims.”

The ruling only applies to the minimum four weeks’ holiday required by EU law and not to the additional 1.6 weeks provided by UK regulations or any discretionary holidays. Employers may also avoid costly retrospective claims, stemming back many months or even years, if they can establish a gap of more than 3 months between successive underpayments of holiday pay. The decision is likely to be appealed to the Court of Appeal.

Enjoyed this? Read more from Linder Myers

Latest news

1

Vape firm IVG targets £1bn revenue IVG Preston staff

Vape firm IVG targets £1bn revenue

08 Jul 2026

2

EG On The Move adds 85 forecourts to its portfolio Zuber Issa

EG On The Move adds 85 forecourts to its portfolio

06 Jul 2026

3

£4.6bn fighter jet contract boosts BAE Systems' Lancashire programme GCAP funding

£4.6bn fighter jet contract boosts BAE Systems' Lancashire programme

06 Jul 2026

4

Lancashire leaders help shape Northern Growth Strategy Phil Riley, Tom Riordan and Stephen Atkinson

Lancashire leaders help shape Northern Growth Strategy

06 Jul 2026

5

New road boosts access to Blackpool Airport Enterprise Zone Natures Aid

New road boosts access to Blackpool Airport Enterprise Zone

06 Jul 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
LBV129 July/August Magazine Networking Event
Nov/Dec Networking Event
Networking
16 Jul 2026

LBV129 July/August Magazine Networking Event

Brysdales, Britannia Buildings Drumhead Road, Chorley, PR6 7BX

16:00 - 18:00

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 2Q

08:30 - 10:30

Built Environment Conference 2026
BEC Listing
Networking
24 Sep 2026

Built Environment Conference 2026

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

Clubhouse Business Network sponsored by Orca Finance - July 2026
padel-networkpng.png.png
LBV Hub Networking
09 Jul 2026 - 09 Jul 2026

Clubhouse Business Network sponsored by Orca Finance - July 2026

Clubhouse, Blackburn, BB1 3NT

14:00 - 16:00

Chamber Summer BBQ
LBV Hub Social
09 Jul 2026

Chamber Summer BBQ

The Borough , Lancaster, LA1 1PP

17:30 - 20:00

Society1 Breakfast Social and Coworking Day
LBV Hub Networking
09 Jul 2026

Society1 Breakfast Social and Coworking Day

Society1, Coworking Space, Preston, PR1 3LT

09:00 - 17:00

July Preston Tech Connection Hot Takes
PTC Square July (900 x 900 px).png.png
LBV Hub Networking
15 Jul 2026

July Preston Tech Connection Hot Takes

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:03

Preparing for the changes to unfair dismissal
Logo.jpg.jpg
LBV Hub Seminars
15 Jul 2026

Preparing for the changes to unfair dismissal

The Longlands Hotel, Carnforth, LA6 1JH

08:00 - 10:00

Achieving more with your money: Your options at retirement
LBV Hub Seminars
16 Jul 2026

Achieving more with your money: Your options at retirement

Accrington Stanley Football Club, Accrington, BB5 5BX

17:55 - 17:55

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