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

EG On The Move seals 27-site deal Zuber Issa, pic provided by EG On The Move

EG On The Move seals 27-site deal

01 May 2026

2

FWP’s community goal for Trafford FC is a winner Trafford FC plan

FWP’s community goal for Trafford FC is a winner

01 May 2026

3

Strong results in first year as EOT for Conlon Construction Conlon board includes Andrew Makinson, Lee Parry, Nadine Ng, Darren Lee, and chairman Guy Parker

Strong results in first year as EOT for Conlon Construction

30 Apr 2026

4

Lancashire manufacturers backed to adopt AI with new Made Smarter toolkit ELE Advanced Technologies

Lancashire manufacturers backed to adopt AI with new Made Smarter toolkit

30 Apr 2026

5

Experts stress the urgency of starting AI journey Speakers at the Cybersecurity summit

Experts stress the urgency of starting AI journey

30 Apr 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
LBV128 May/June Magazine Networking Event
Canva - Mag Launch
Networking
19 May 2026

LBV128 May/June Magazine Networking Event

Colne Market Hall, Lancashire, BB8 0HS

08:30 - 10:30

Funding Summit
Funding Logo Canva Mid
Summit
17 Jun 2026 - 17 Jun 2026

Funding Summit

Village Hotel Blackpool

08:30 - 11:00

Blackburn Beer and Gin Festival 2026
Blackburn Beer and Gin Festival 2026
LBV Hub Social
01 May 2026

Blackburn Beer and Gin Festival 2026

BB1 8NB

17:00 - 23:00

Society1 Open Coworking Day
LBV Hub Networking
06 May 2026 - 06 May 2026

Society1 Open Coworking Day

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 16:00

The AI Lab: E-commerce
LBV Hub Seminars
08 May 2026 - 08 May 2026

The AI Lab: E-commerce

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

09:00 - 11:30

Emergency First Aid at Work
LBV Hub Seminars
08 May 2026 - 08 May 2026

Emergency First Aid at Work

FGH Training, 3rd Floor, Storey House, White Cross Business Park, Lancaster, LA1 4XQ

09:00 - 16:00

Fire Warden Training
Logo.jpg.jpg
LBV Hub Seminars
11 May 2026 - 11 May 2026

Fire Warden Training

Bell Lancaster, Cleveley House Farm, Miller Brow, , Forton, PR3 1DR

09:00 - 15:00

The Business Network Central and East Lancashire
LBV Hub Networking
14 May 2026 - 14 May 2026

The Business Network Central and East Lancashire

Longridge House, Preston, PR3 2TB

11:30 - 14:15

Research and Knowledge Exchange Festival 2026
Spark 2026 newsletter v3-5 (1).png.png
LBV Hub Seminars
18 May 2026 - 22 May 2026

Research and Knowledge Exchange Festival 2026

University of Lancashire, Preston, PR1 2HE

10:00 - 20:00

Culture, Community & Commerce in the City # 1 - Northern Dough Co x WASH Studio
8.png.png
LBV Hub Networking
20 May 2026 - 20 May 2026

Culture, Community & Commerce in the City # 1 - Northern Dough Co x WASH Studio

SOciety1, Coworking Space, Preston, PR1 3LT

18:00 - 20:30

How to handle an underperforming employee
Logo.jpg.jpg
LBV Hub Seminars
20 May 2026 - 20 May 2026

How to handle an underperforming employee

The Longlands Hotel, Carnforth, LA6 1JH

08:00 - 10:00

Stop Underselling, price for profit, not just survival
Logo.jpg.jpg
LBV Hub Seminars
21 May 2026 - 21 May 2026

Stop Underselling, price for profit, not just survival

Lancaster & Morecambe College, Lancaster, LA1 2TZ

08:00 - 10:00

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 LBV124 Online Graphic
Subscribe now

Weekly news bulletin