[Closed] Overtime and holiday pay

It'll take years to sort it out - I can't see anything ever coming of it.

But surely overtime is just that - if you get paid a basic, when you are on holiday you should be paid the basic, not what you might have earned if you had done overtime in that particular timeframe.

Another reason for companies not to take on more staff - the red tape of employing is getting ever longer.

overtime? whats that?

My company calculate your holiday pay based on the last 3 months wages so this has been the norm for me for a while now. Usually adds 20% to my basic salary.

Johndoh

It's tough, you could argue that it should depend just how compulsory that voluntary overtime was

If it made up the normal pattern of your work, and you were expected to do it whether you wanted to or not, then should you suffer financially because the law and employer mandated you had to have the day off?

At the same time, I'm sure others would argue that employers should not be rewarded for understaffing, ie employing nine people to do the work of ten, because they save on holiday pay and taxes.

At the same time, I'm sure others would argue that employers should not be rewarded for understaffing, ie employing nine people to do the work of ten, because they save on holiday pay and taxes.

With this ruling, would there come a point where it would be cheaper for a company to employ more people on a baisc wage to avoid having to pay existing empolyees overtime? Or do the other employment costs always outweigh taking on extra staff?

My company calculate your holiday pay based on the last 3 months wages

overtime? whats that?

Holiday pay? What's that?

Chakaping if you're working for yourself then you have other nice dodges to boost your income. If you're a wage slave then it's now a contractual requirement (thank you EU commission).

(Three edits to get your name right, bloody autocorrect)!!

I guess it all comes down to how voluntary it is, frankly if that overtime is week in week out its not really overtime and should be staffed (I believe in Germany there are big penalties for companies having regular overtime rather than employing enough people though I accept this is hear say so stand ready to be corrected)

Personally I'd have no problem with it going forward assuming the ruling took effect say six months from now, as it would give time for companies to recruit to fill the vacancies getting rid of overtime creates - in theory it will increase employment, possibly create some completion for a work force and push wages up - or accept the costs of keeping the overtime and paying holiday. The issue comes if they back date which will be crippling for a lot of companies.

Of course the unions will be up in arms of the overtime goes as they'll want their cake as well as eating it.

then you have other nice dodges to boost your income

EDIT: your phone, your car/transport, your work clothes, your laptop, your meal at work are all tax deductible. Oddly I have to get to work and eat whilst there and I am not allowed to be naked either

Its clearly a swings and roundabout thing as i get holiday pay and sick pay etc

if you get paid a basic, when you are on holiday you should be paid the basic, not what you might have earned if you had done overtime in that particular timeframe.

You should get paid based on what you ACTUALLY work not the theoretical minimum you can work but what you really work

It will hit some companies but they have been robbing from us for years by this practice

Just discussing this, it winds me right up at work the fact they call it "overtime" yet there's no choice at all about whether you actually want to work every other Sat.

your phone, your car/transport, your work clothes, your laptop, your meal at work are all tax deductible

Hi everyone I am back, just in case anyone is concerned I am not trolling 🙂

This seems a most bizarre ruling to me. I have no doubt it will be appealed and/or contracts will be re-written, the worst case scenario would suggest even more zero-hours contracts.

How can someone be entitled to be paid overtime when on holiday, yes you should be paid for what you actually work but on holiday you are not actually working. I fully appreciate the issue where employees are expected to work overtime and that becomes the "norm" but contractually the employer has the flexibility to reduce overtime if the business doesn't warrant it, that's better than laying people off.

EDIT: clothes are only tax deductable if they are specialist. Likewise meals are only tax deductable, ie an expense, if they are exceptional, eg due to extra late working or travel or when entertaining for business purposes (eg client or supplier)

Looks like another nail in the British industry ...

Bye bye employment and hello zero hour EU/non-EU migrant contractors.

😀

it will hit some companies but they have been robbing from us for years by this practice

of course had people not (for the most part) been happy with the way these things worked they could simply have not done the overtime. They could in practice have taken a second job which did pay holiday in the same hours as they worked overtime.

For years people have been "happy" with the status quo and should the impact be retroactively applied will now benefit from changes to something they entered into as a willing party. They've not been robbed, they sold (themselves) at a price they were happy with.

How can someone be entitled to be paid overtime when on holiday, yes you should be paid for what you actually work but on holiday you are not actually working.

Isn't the justification for paid overtime on holiday the same as for paid normal work when on holiday?

Why would someone working 10 hours + 30 'overtime' every week have less holiday pay than someone working 40 hours?

How can someone be entitled to be paid overtime when on holiday, yes you should be paid for what you actually work but on holiday you are not actually working

they call it "overtime" yet there's no choice at all

Surely that's not voluntary then? Obligated hours being "sold" as overtime is surely an entirely different issue?

How can someone be entitled to be paid overtime when on holiday, yes you should be paid for what you actually work but on holiday you are not actually working. I fully appreciate the issue where employees are expected to work overtime and that becomes the "norm" but contractually the employer has the flexibility to reduce overtime if the business doesn't warrant it, that's better than laying people off.

the EC regulation was that people had to have X weeks holiday at 'Normal pay' - the interpretation of this was not including overtime. There was case law a few years back where someone challenged this with regard to overtime and the tribunal ruled that contractual overtime would be included (ie. Where your contract stated you worked x hours per week plus y hours overtime) but not mandatory or voluntary overtime, even if this was normal

I think one of the other aspects today was a bloke working for British Gas where his basic wage only made up 40% of his wages, the rest was commission, if he was off on holiday then he only got paid at basic wage rate!

I looked back at 2001 tax year, and I grossed 24k on a 14.5k basic, overtime was part of the job (7 day a week cover was required, and we had an overtime rota for weekends, if someone was off sick, we had to pick up their work and cover it, but got paid overtime) I would say that my 'normal weekly wage' included overtime earnings.

How can someone be entitled to be paid overtime when on holiday, yes you should be paid for what you actually work

+1 what dangerbrain said.

Its a matter of definition above all else. This will apply to mandatory "overtime" contracts. And really in the process "overtime" in this instance should have a new name to make the distinction between voluntary and normal required business hours.

I propose three types of wage hours:
1) poo time - standard 39hrs work time
2) double poo time - those hours required to be worked as part of shift patterns or normal business.
3) fap time - when you volunteer for out of hours cover and know no one else will be there to catch you fapping.

johndoh - they kind of had to as it's not a job where you can work up to your contracted 39 hour then just go home, a bit of overtime is inevitable (involves driving with long distances involved). They were given the option of paying holiday pay based on average hours worked or having staff en mass returning to base when they were close to their hours then standing around idle until clocking-out time.

Good point on the sick pay junkyard!

his basic wage only made up 40% of his wages, the rest was commission, if he was off on holiday then he only got paid at basic wage rate!

If on the other hand his commission was a result of his input/output alone then not paying it when he's not effecting [what ever it is based on] does seem grossly unreasonable.

My rota involves a certain amount of compulsory overtime - where you are on call and obliged to work in case of sickness or absence - and a certain (larger) amount of voluntary overtime.

I've been with my employer a good few years now so any backdated pay award would add up to a significant sum.

However, if it means they slash overtime as a result of this ruling it will be a sad day for the STW Classifieds forum cos that's where my spare/extra/pocket money comes from.

Surely all its saying is that you should accrue a paid holiday allowance while doing overtime just as you would during normal hours. I don't see how this is controversial.

I don't really accept that Dangerous - the original EU rule was that workers should receive their “normal remuneration” while on holiday

it was the UK governments interpretation at the time of imposing the working time regulations was that 'normal renumeration' didn't include overtime or commission, and employers followed that advice (and I'll accept that that means the employers too have been treated shoddily) - I reckon that to 99% of the working population 'normal renumeration' means what you normally get paid when you go to work and do your job as expected of you, and that would include your regular overtime/commission.

I also don't think that its fair to say that people accepted this or didn't cry foul, some of us did question it at the time, but we were bound by the governments advice and caselaw at the time - the decision from this tribunal seems to be that that advice and caselaw of the time did not adequately implement the European law on working time.

Only backdated 3 months apparently.

Danger brain - the flip side is the company did this as they new he would get paid more than his basic so they did it to both avoid their legal and moral obligation re holidays and sick pay. It should be based on what you earn not some cleverly worded contract to minimise the employers payments.

People used to "sign up" for the dark satanic mills but it was hardly fair or reasonable.
Its unfair and against the law and , frankly, employers were taking the piss.

Just when I'd stopped being harassed by ambulance chasers and PPI lawyers, now this comes along..... 🙄

Why would someone working 10 hours + 30 'overtime' every week have less holiday pay than someone working 40 hours?

Just curious as to whether the overtime in the example of the British Gas employee in he case was at his basic rate of pay or a premium ?

it will hit some companies but they have been robbing from us for years by this practice

Have they though?

I know my own employers (a pretty big engineering firm) have fits and starts with OT, we try to plan and staff to meet our [i]nominal[/i] work throughput, assuming everyone works their contracted hours, we often supplement the core staff workforce with contractors, but sometimes OT working is simply needed, when there isn't the time to recruit, train and familiarise someone for what might just be a couple of weeks work...

We bill our clients directly for every hour spent on the work and as a salaried employee I log my hours and have the option to either claim any hours I work over those I'm contracted to, as flat rate pay or more typically as 'TOIL'. So effectively I already get additional paid holiday for working overtime...

This seems like a very fair arrangement to me, but apparently it might not be compliant with the letter of this judgement, we've been told today that there may be a review of how the company operates it's overtime/holiday arrangements...

I naively thought you just got your annual salary + performance bonus with 40 (or whatever) days holiday and a few B/H days.

Do you mean some people get payed a different amount depending if it's a work day or a holiday ? How quaint, must be some working-class thing

Hill dodger, I was once interviewed for a job in the bike industry whereby of the four criteria that had to be met in order for you to get your 'performance' bonus/commission, only one was in [b]your[/b] control

I did laugh when they tried to explain and justify this 😐

@Ninfan, in my last job in the bank, after they discovered that we did a job that you couldn't realistically measure and put targets on, they decided that the best thing to do was to base our bonus on the team next door, who did a totally different job 😆

Well, that's an effective motivator 🙁

Maybe in some weird game of thrones style plot they told the team next door that their bonus was based on your teams performance, hoping it would spur you on to mutual success, overlooking the likelihood of you both kicking back and relaxing and letting the other team get on with it... And that ladies and gentlemen is how the global financial crisis started 😆

any one who works actually wondered how these firms are going to work it, how much is owed to staff, who is going to check the recoprds if any still available, and how is it all going to be paid for.

Firms will probably shred or destroy time sheets, will ask for all info in triplicate, will take their time, and probably sack or make peeps redundant at minimum rates.

Its going to be un enforceable anmd jsut be a false hope for many workers.

I got the wrong end of the stick when I skim read this on the BBC this morning, I thought they were asking to accrue/earn holiday for overtime i.e. if you worked loads of overtime you may get a couple of days added to your holiday allowance. Way off the mark once I started reading this thread 😯

One business owner quoted on the beeb has 27 employees of which 18 do regular overtime...he threatens to stop overtime if this gets agreed. Surely he should stop relying on overtime for routine work and staff appropriately, overtime at 1.5 rate would normally only make business sense for short term/seasonal blips in trade.

I'll be watching with interest as it could impact me - at week 45 this year I reckon I've probably done 35-40 days voluntary overtime, and 3 or 4 compulsory overtime shifts due to being on-call overnight (although the standby pay/emergency attendance element might make it not count as compulsory)

I don't see how firms can disguise overtime worked unless its cash-in-hand, wouldn't most payslips show the basic pay and any additional pay elements separately?

I think the big thing is, there are employers who abuse their employees over this. I know one company that only pay thier staff for a 6hr day, but the staff are expected to make that up to 8-9 with overtime. That way it costs the company less for staff who're rostered spare, and cuts down on holiday pay quite substantially.

I know one guy who works for them, and due to being on holiday for two weeks after being in the office for a couple weeks without overtime, ended up with his monthly pay being nearly half of his usual pay.

However I think there does need to be some clarification between expected overtime, and voluntary overtime, but there are always employers who'll try and manipulate the system.

This ruling might affect me to a small extent, as due to working shifts, I can't claim certain allowances when I'm on holiday, but at most I may end up with a couple hundred pounds, so I'm just going to wait and see what happens.

I think there is one area not yet discussed, and that'll be the employment agencies where the temps work for them and they bill clients. Mainy thinking of the low-pay temps, who need to work maximum hours to make a living.

Their 'employees' will be after the money, but the agencies won't be able to bill their clients. Depending on how retrospective this goes, you could see a load of them go to the wall.

Agreed there are some who took the piss but equally people didn't have to do the jobs. Personally given the choice of no job vs job I'd be doing the job, even if it was a joke and I agree there are many more the same. On the otherhand if it were me on contracted on shift for 6 hours expected to do three hours overtime a day I'd be going home after six hours until they either got rid of me for only doing my contacted hours or contacted me for nine, either regular or otherwise.

I believe though may be wrong that these cases have been backed via unions who should have been fighting not for better holiday payment terms but for real contacts and real hours for the staff - though doubtless the overtime payments are more lucrative than if they were paid as normal hours.

I've no issue with the decision, per my first post, my complaint is that there were two parties to the agreements and one is being screwed because it did what it was told was fine (if clearly morally wrong) and the other gets to have their premium payment and eat it. I imagine that of the decision had gone along the lines of yes they underpaid your holiday as your "overtime " wasn't it was normal hours so they'll have to pay you all your holiday back pay but you'll have to give them back all the premium payment for doing overtime that wasn't there would be some serious shouting going on.

Frankly the idea of overtime as anything other than a "we're in the poo" fix is the problem, if you have 20 hours of extra work a week every week to give out you should be employing someone for those 20 hours not handing it out to people as overtime.

How the ruling will be interpreted is something we'll have to wait a see. I've personally had a few experiences of different takes on holiday pay and one from a flat mate who fell foul of what the ruling is roughly about.

One company I worked for used overtime to meet basic output requirements. They ran a 5 day week on shifts on most of the production lines, a couple ran over 7 days. They used overtime to cover it. But they used a 12 week average of earnings as holiday pay. If you worked 40 hours basic and 8 hours OT at x1.5 on average, then that's what you got for a week on holiday.

Another ran continental shifts, 4 on 4 off 12 hour shifts, but paid 40 hours basic plus 2 hours OT at normal time. This then equalled the weekly average hours. But they also paid shift allowance on the 40 hours, good attendance bonus, good time keeping bonus, and production target bonus. The basic pay was about 50% of your pay, which is what you got as holiday pay. Not very fair when they advertised the job as £32k, but the basic pay was £16k.

The flat mate took a job at Safeway supermarket, years ago. 12 hour per week contract. In the first 6 months he didn't work under 40 hours per week. Holiday pay was 12 per week. But they wouldn't let him have a week off only 12 hours. They 'required' him to work his extra hours to keep the store staffed.

I think this may have an effect on the companies that under employ as a policy, or state compulsory OT is required. It may just drive them to use temporary labour through agencies.

And we wonder why UK has poor productivity record. Bad enough that this is being considered, but barking to think about applying it retrospectively. Do these people engage their brains first.....?

And on the same day RR announces that it's to cut 2600 jobs and we wonder why .

Do we?

"Company sources say that the aviation losses are more closely linked to a general cut in global defence spending, greater productivity after investment in new factories and an end of the development phase of the new Airbus A350 and Dreamliner engines."

HTH

@Northwind RR's biggest competitors are in the US, if we look at their labour laws we'll see a big differential with us here in the UK. I don't think you'll see overtime as holiday pay there and I suspect they don't even get 4 weeks holiday either. I am not in favour of zero hour contracts or of the use of "compulsory" overtime but rulings such as this just push more employers towards the former and either push up costs to the consumer or reduce employment/employment growth or indeed a bit of both

Ah right, so it's nothing to do with the reasons RR sources are giving. Glad we cleared [i]that[/i] up.

I am surprised that this got as far as it did. For compulsory overtime then maybe, but voluntary overtime I don't see why, it’s voluntary.

For a "normal" Monday to Friday job (even though I work shifts)a weeks holiday would cost you 5 days(or hours worth) of your holiday entitlement.
If people want paying for their Saturday overtime shift as well should they have to use another days Holiday?

The unions will herald it as a great success, as will the overtime factory cats (every factory has some, people who live for and by their overtime, always at work).
However when companies tighten up and vastly reduce overtime, or worse still bring in annualised hours contract (paid for a set number of hours per year, the company can move your days around to suit business needs and eliminated overtime), these people will not be so happy.

Either way it could take years to sort out, if it is even passed fully by the courts

[i]I don't think you'll see overtime as holiday pay there and I suspect they don't even get 4 weeks holiday either[/i]

and I reckon you've no idea what you are talking about

Their employment rules are totally different to ours, but also vary by state. For example the guys I worked with in NY got the same number of days off per year as we did, they just were called different things (vacation, personal days, family days etc).

[quote=b r said]For example the guys I worked with in NY got the same number of days off per year as we did, they just were called different things (vacation, personal days, family days etc).

All paid days off ?