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The appeal judgement we have been closely watching was this week handed down, further indicating that the calculation of holiday pay in Northern Ireland and the UK as we know it is changing. The Employment Appeal Tribunal has ruled that the Working Time Regulations can be interpreted to include commission payments within holiday pay.
It’s not surprising that ahead of this decision we received many queries from local employers concerned about potential claims and what it means for their salary bill (already one of the largest company expenses) going forward. Unfortunately, whilst the decision followed the outcome of the Bear Scotland case last year which dealt with non-guaranteed overtime by confirming inclusion of commission payments, no guidance was given on how it should be calculated.
Janet Kerrigan from the consultancy division within Northern Ireland based Willis Insurance & Risk Management said: “The judgement this week rejecting the employer’s appeal suggests that employers across the province will potentially face considerable financial implications. Whilst some of the employers we work with anticipated the outcome and have been proactive in reviewing their approach to holiday pay, others must now review their arrangements and seek to minimise risk.”
Janet Kerrigan added: “I imagine this will not be the last word on the issue as the decision will likely be further appealed. Indeed, if appealed to the Court of Appeal a final decision could be years away, however reviewing overtime practice and commission structures now whilst we await further confirmation may reduce the risk of future legal claims.”
We at Willis Consulting and Employment Services will continue to work in partnership with our clients to ascertain potential liability in respect of both underpayments and increased future holiday payments. We are taking a proactive approach, conducting reviews of current practices, procedures and pay structures, and helping to devise strategies to minimise contingent liability from retrospective claims. Importantly we’re also helping clients to plan ahead and budget for future staffing costs.
Now is the time to seek advice to help minimise your liability moving forward. Call us today on 02890 329042 or email firstname.lastname@example.org and a member of the Willis Consulting team will be happy to help.