Tales of an HR Services Expert – Day 20: Overtime doesn’t earn holiday!

Overtime doesn’t count towards holiday entitlement – or does it?

The Employment Appeal Tribunal (EAT) decided on 4 November 2014 that any overtime worked does count towards an employee’s holiday entitlement. Yikes!

What does that actually mean?

It means that if you have in their contracts that they work 20 hours a week, and they regularly work 10 hours overtime, every week, then their entitlement will be the same as if you had 30 hours in their contracts.

They can’t ever earn more than full time holiday entitlement of 28 days (which can include bank holidays).

Do I need to worry?

NO! This ruling only applies to COMPULSORY overtime, not voluntary overtime. If you offer overtime and they choose to take it, there is no extra holiday entitlement.

It is also restricted to the previous 3 months, not going back years. If staff don’t claim their extra holiday entitlement within 3 months of earning it, it is lost.

And the ruling is not final. This will go all the way up to Europe to be decided.

So don’t rush to pay out any extra holiday pay yet. Let’s wait a while for the lawyers to argue it out (at someone else’s expense!). Then make the changes!

Have a Question? Get in touch below...

    If you are an employee and feel that you have been treated badly, then we strongly advise you to contact ACAS:

    Call the ACAS Helpline on 0300 123 1100 for free support and advice.

    Simply get in touch and they'll provide you with clear and confidential guidance about any kind of dispute or query that you have about relationship issues within the workplace.

    You may want to know about employment rights and rules, best practice or you may need advice about a dispute.

    Whatever it is, just give ACAS a call, their team are on hand to respond within the hours: Monday-Friday, 8am-8pm and Saturday, 9am-1pm.

    Who We Work With