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The interesting (and, let’s face it, sometimes infuriating) thing about employment law is, it changes more frequently than the weather.

This week’s surprise is that despite domestic law saying something different, the Employment Appeal Tribunal has now decided that non-guaranteed overtime must be counted in the calculation of minimum statutory holiday pay under the Working Time Directive.

Members of the trade union Unite have been successful in the EAT in arguing that the Working Time Directive requires compulsory but non-guaranteed overtime to be taken into account in the calculation of holiday pay, despite domestic law providing that only contractual and guaranteed overtime should be factored into the calculation.

The EAT thought that Article 7 of the Working Time Directive meant that all normal remuneration needed to be included and that this meant regular overtime worked even if not guaranteed.

The EAT further held that the outstanding amounts could potentially be claimed as a series of unlawful deductions from wages, but that deductions made more than three months apart would not be a series of deductions due to the fact that there is a three month time limit for each breach. This reasoning isn’t wholly convincing given the wording of the legislation and it will be interesting to see what is said in the appeal that will inevitably follow this decision.

In the meantime, if you are an employer or an employee needing help with questions about holiday pay and overtime, contact Alison, Paul, Madeleine or Claire at Workwise Legal.