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Holiday Pay Ruling

The recent judge’s ruling that firms should include overtime in workers’ holiday pay will mean higher labour costs, say main contractors. They are calling for an urgent review of the ruling.
The tribunal judge said overtime pay should be considered as part of ‘normal remuneration’ and included in calculations of holiday pay. Civil Engineering Contractors Association chief executive Alasdair Reisner said: ‘Contractors will be worried about the potential impact the decision could have on their businesses.’
Unite union brought the original case against Amec and Hertel on behalf of 16 members who worked on a project in Nottinghamshire. They were required to work overtime and received payments for the time they spent travelling. However, those payments were not included in holiday pay, meaning workers received less pay when on holiday, compared with the time they spent working.
Amec and Hertel appealed against the employment tribunal’s findings that workers could claim back-dated arrears of pay as ‘unlawful deductions’ from their wages. However, the judge ruled that workers could only make claims for back-dated pay for a limited time period, no more than three months from the last incorrect payment received by the employee.
Tim Thomas, of the manufacturers’ organisation EEF, warned the ruling could have ‘damaging consequences for jobs and investment’.
Howard Beckett of Unite said: ‘Up until now some workers who are required to do overtime have been penalised for taking the time off they are entitled to. This ruling not only secures justice for our members who were short-changed, but also means employers have got to get their house in order.’
Construction union Ucatt also welcomed the decision and said construction employers had to comply with the decision.
Steve Murphy general secretary of Ucatt, said: ‘Construction workers are often reliant on overtime to make ends meet. Workers should not be penalised by having their pay cut when taking holidays.’

This article has been reproduced from the Contract Flooring Journal. You can find them at