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

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