CBI sounds warning about European Court holiday pay ruling
A ruling in May from the European Court of Justice (ECJ) on holiday pay could cost SMEs 'billions' in back payments, according to the CBI.
The decision, which was handed down following a tribunal claim, holds that the holiday pay of workers whose salary comprises a regular commission should include a sum that reflects an average of that commission.
Until now, holiday pay has usually been calculated on basic salary, excluding extras such as bonuses, overtime and commission payments.
The manufacturers' organisation EEF estimated that an SME in the manufacturing sector with a £30 million annual turnover could expect to get a potential bill of £2.75 million.
The CBI said the decision was 'the single biggest employment issue for businesses' and called on the Government to 'vigorously defend' existing UK law.
A ruling by the ECJ in an earlier case already laid down the principle that holiday pay should reflect 'the normal remuneration' received by a worker.
Acas publications and services
Acas has published the Advice leaflet - Holidays and holiday pay [164kb], which covers everything you need to know about annual leave entitlements, giving notice, taking leave, and calculating holiday pay.
Acas training on Contracts and terms and conditions, includes a detailed look at how to deal with contracts, pay and holidays.
For free, impartial advice on any employment relations issue, call the Acas Helpline on 0300 123 1100, or consult Helpline Online.
Visit the Acas Training and Business Solutions area for more information.
This news content or feature has been generated by a third party. Commentary, opinion and content do not necessarily represent the opinion of Acas.
We recommend that you explore further information and advice available on this website, particularly within our Advice A-Z guidance pages. If you have questions about workplace rights and rules visit Helpline Online.
This news content or feature may be reproduced free of charge in any format or medium for research, private study or for internal circulation within an organisation, subject to accurate reproduction.