Do you pay overtime to your employees whilst paying just basic pay whilst they are on holiday?

The Employment Appeal Tribunal decided last week that when an employee takes their initial holiday (up to the point of the initial statutory minimum of 20 days per year for a full time employee, it does not include the 8 bank and public holidays) they are entitled to be paid what they would have received had they been at work.

They should not be worse off for taking holiday. They have interpreted that to mean that the employee should receive an average sum for overtime they work, even if on the particular week they are on holiday there won’t be any overtime.

Some employers already pay an element in their holiday pay to cover overtime. Where overtime is compulsory then most employers already pay holiday pay that includes the overtime being missed but this new ruling relates to overtime worked voluntarily.

Unfortunately the decision did not detail how to calculate what the payment would be but the suggestions are that it will be the average overtime worked in either the 12 months prior to the holiday or 12 weeks prior to the holiday. That uncertainty will not help and further guidance is expected from the Government on that issue.

In addition, there is the risk that where employers have, to date, not paid holiday pay to include overtime then employees could claim unlawful deductions. Any gap of 3 months either since the last holiday, or between holiday periods, will break the chain or stop the remainder being claimed as “unlawful deductions”. However, the employees could still make a breach of contract claim for under payments made in the last 6 years.

Flexible working - it just got harder to say "No"

It has been labelled as "New rights to request flexible working", but employees have always been able to ask.  The changes are seen in how an employer can respond.

From 30th June 2014, it will be harder to refuse a request.  If an employer wants to refuse such a request and the employee has 26 weeks service and has requested it referring to the regulations, even if the change is just a lifestyle change and not to care for a relative or child.  The employer can only refuse if the reason for a refusal fails within 8 business reasons which include: "the burden of additional costs" and "detrimental impact on quality".

Further danger zones for employers exist in the way the request is handled.  The procedure has been changed to be far less prescriptive but the request must be "dealt within a reasonable manner".