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WORKING TIME REGULATIONS: Calculating holiday pay after Lock

WORKING TIME REGULATIONS: Calculating holiday pay after Lock

The cost of paid holiday is set to increase for employers following recent court decisions on what components of pay are to be included.

The courts in a number of cases have looked at the issue of holiday pay and have ruled that it cannot be based on basic salary but rather must correspond to ‘normal remuneration’. If such items as commission and non-guaranteed payments are not taken into account then workers will be financially disadvantaged when taking holiday, as they will not earn such payments during the holiday period. In addition, workers may be reluctant to take the leave due to the drop in salary, which would be contrary to the Working Time Directive’s purpose.

To read the rest of Rebecca McGuirk's article in Employment Law Journal, click here (pay wall).