Whether you have a legal, tax, insurance, management or land issue, Farmers Weekly’s Business Clinic experts can help.
Here, Natalie Ward, senior associate at Thrings, advises on the employer’s obligation to include overtime in holiday pay calculations.
Q: Following your article about farm workers’ entitlement to have overtime accounted for in their holiday pay (News, 27 August), I would like some advice.
My employer has always calculated my holiday pay on my basic weekly wage. Some time ago I broached the subject that overtime should be part of the calculation.
The response from my employer was to threaten me with dismissal or the prospect of a court battle. I have worked for this employer for three years and, like so many other farm workers, regularly work about 70 hours a week between February and October, so overtime pay is a considerable part of my regular earnings.
What steps do you advise I take to ensure I get the correct holiday pay please?
A: I am sorry you received a negative response when you raised the issue of holiday pay and overtime with your employer.
However, you are correct: your holiday pay should be calculated based on your basic weekly wage inclusive of overtime.
The Working Time Directive (WTD) requires workers to receive their “normal remuneration” during periods of WTD leave, that is, the four weeks’ leave under regulation 13 of the Working Time Regulations (WTR) 1998 (this doesn’t apply to the statutory holiday entitlement of 1.6 additional weeks leave that UK employees are entitled to under the WTR).
In recent years case law has established that overtime, whether voluntary or contractual, should be taken into account by an employer when looking at average earnings over the past 52 weeks and calculating what they need to pay an employee for their four weeks’ paid leave.
As some time has passed since you last spoke to your employer, you may wish to consider having another conversation with them.
You can discuss, in broad terms, that it is a statutory requirement for holiday pay to be calculated based on a worker’s normal remuneration taking into account any overtime.
Given that it’s a relatively new concept, your employer may be unaware of the changes or feel flummoxed by your request.
You could present them with some evidence of the requirements, including online advice from Acas or copies of Farmers Weekly articles.
Framing the conversation in broader terms may help take the attention away from you specifically and make it a general matter for them to address.
If your employer remains unreceptive, you could raise a formal grievance, setting out your complaint in writing and instigating your employer’s grievance procedure.
Raising a concern about wrongdoing at work that also affects your colleagues – such as a failure to pay appropriate holiday pay – is likely to constitute whistleblowing.
If your employer doesn’t have a whistleblowing policy, raising a grievance should be an adequate means of making the necessary disclosure, as long as you have provided sufficient information that shows your employer is failing to comply with a legal obligation.
If your employer rejects your grievance and still refuses to take any overtime into consideration when calculating your holiday pay, you may wish to consider bringing an unlawful deduction of wages claim in an employment tribunal (ET). This is when a worker or employee has been unpaid or underpaid wages (of which your holiday pay forms part).
If your employer dismisses you or subjects you to some other detriment for raising the issue of underpayment of holiday pay, you may also have a claim for automatic unfair dismissal or for detriment under the whistleblowing legislation.
If you decide you want to bring a claim in an ET, you must contact Acas immediately and instigate the early conciliation process prior to submitting any claim.
Claims in an ET should be brought within three months of the date of dismissal and/or the date the last deduction was made and/or the date of any other detriment suffered.
In relation to holiday pay, where there is a series of deductions, the time limit begins with the last deduction in the series.
You can claim up to two years of deductions as long as there isn’t a gap of three months or more between the deductions.
Once the early conciliation process has concluded, and assuming you have not managed to negotiate a settlement with your employer, you are free to issue a claim with the ET.
Early conciliation presses pause on the normal time limits for issuing claims in the ET, so you should seek appropriate legal advice to ensure you don’t miss the applicable deadline for issuing your claim.
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