Responsible employers should follow the lead on holiday pay

Victoria Phillips is head of employment rights at Thompsons Solicitors

The weekly Thompsons Solicitors blog


Recent news that John Lewis will be handing its 69,000 employees a one-off payment to backdate incorrect holiday pay should serve as an example to other employers to get their houses in order.


Following a review of its holiday pay policies, the John Lewis partnership is paying its staff an extra £40 million for holidays taken since 2006.


The review was triggered by developing case law on working time. It concluded that their calculations about what their employees should receive while on leave have been wrong by excluding additions such as premiums for working on Sundays or bank holidays.


The major judgment on the issue was a Thompsons case – BA v Williams. The Supreme Court ruled in 2012 that holiday pay of pilots should include allowances on top of their basic salary, which were included in their overall pay.


To date, most employers have failed to take heed of this case and are continuing to calculate payments for holiday leave using basic pay.


But, at a recent Birmingham Employment Tribunal, the judgment in another Thompsons case – Neal v Freightliner – re-emphasised that normal remuneration – including premiums - should be paid, based on European case law and Williams.


The John Lewis example should prompt other employers to address this issue. But if they don’t, the Williams and Neal cases mean they will inevitably lose if they are challenged at employment tribunals.


Trade unions can now rely on two recent and authoritative judgments when pressing for members to get their full holiday pay entitlements.


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