In the case of British Airways plc v Williams and ors, the Supreme Court held that holiday pay must correspond to a worker’s normal remuneration and should take into account payments which are ‘intrinsically linked’ to the performance of the tasks which the worker is required to carry out under his or her contract of employment.
Last year, the recent Employment Tribunal case of Neal v Freightliner Ltd applied the BA decision and held that an employee was entitled to have voluntary overtime and shift premiums taken into account when calculating holiday pay. This decision was later followed in the case of Bear Scotland Ltd v Fulton.
In each case, the decision was appealed. The appeals have been consolidated and are due to be heard in the EAT on 30 and 31 July 2014. The EAT’s findings will provide some much needed certainty as to whether voluntary overtime and shift premia need to be included in the calculation of holiday pay. We will be following these cases and will update when a decision is reached. Until then, watch this space…