2017 court ruling where overtime should be included in holiday pay

[Shapemyeyebrows]

Hi, due to the above ruling we have been told at work that we will be backdated for the last 2 years on holiday pay for regular overtime we have done. I can’t seem to find an explanation (that I understand!) online about how this will be worked out. We have been told we will receive some backdated pay but we have no idea how much it will be or how they will calculate it and I wouldn’t even know if it was the right amount anyway. So wondering if anyone can give me an idea of how it works please?

It should be 12.07% of what ever you were paid for hours worked.

@Welovechristmas so say I work full time and get 26 days holiday. Any overtime I did on top would that be calculated at 12.07%? Sorry if I’m misunderstanding, I’ve just read so many different things about it and our work have been unclear other than saying we will get some back pay.

It's illegal to calculate holiday pay like that and has been for a good while

Ime you won't get a simple explanation as it's not a simple calculation. Is there any reason to think it won't be done correctly?

@Shapemyeyebrows the correct way to work it out is to work out the reference period which is either 12 or 52 weeks ending the day before each period of leave. So if you take 7th of June as leave it would be the 52 weeks ending on 6th June. This should be done for each period of leave.

However, I would work out the arrears period e.g. 1 April 2021 to 31 March 2023 ( 104.28 weeks) add up all the overtime in that period. Divide by the number of working hours in that period = 3900 (37.5 hours x 104 weeks) to give an average hourly rate.

Add up all the annual leave, including BH in the same period, if necessary convert to hours and then multiply by the average hourly rate of overtime to get the arrears due.

Note: I use hours because it ensures you are being absolutely fair e.g. mid leave year changes in working patterns etc.

@Tippingadvice thank you

We get this at work, have done for several years.

In practice, we get an extra circa 7.5% of the £ amount earned for any OT hours...it's between 7 and 8% but I don't recall the exact figure.

@PucketyPuckPuck thank you.

@Shapemyeyebrows and @PucketyPuckPuck as @VisionsOfSplendour said using a % is not a legal way to calculate holiday pay.

@Tippingadvice personally i've no idea of the specifics of the law/policy/calculations behind it.

It's a set percentage that's the same every month...I believe it may be + 7.69%. So £100 of OT results in £107.69 in your pay.

However, I work for a global financial firm which has an extremely tight grip on such things. Very good employer, thousands of staff, in house legal and accounting teams. I'd be absolutely astonished if they were doing something so basic incorrectly or illegally.

@PucketyPuckPuck just out of curiosity do they pay holiday pay when you take leave or as a separate payment on your payslip when you work overtime I.e. rolled up holiday pay.

The reason for asking is it is unlawful to pay rolled up holiday pay you must pay it when the person takes leave. As per gov.uk
https://www.gov.uk/holiday-entitlement-rights/holiday-pay-the-basics

“Rolled-up holiday payHoliday pay should be paid for the time when annual leave is taken. An employer cannot include an amount for holiday pay in the hourly rate (known as ‘rolled-up holiday pay’).”

Maybe they aren't covered by UK legislation or maybe they don't care that it's wrong