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Holiday Pay – does it include Overtime?

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Back in November 2014, the BBC reported..

Workers have won a ground-breaking case at the Employment Appeal Tribunal to include overtime in holiday pay.

This means some people working overtime could claim for additional holiday pay. Currently, only basic pay counts when calculating holiday pay.

Since then we have had further legislation, the Deduction from Wages (Limitation) Regulations 2014 (the Regulations), which impose the 2 year limit on any new holiday pay claims raised from 1st July 2015 onwards. Separately, a recent case from the Northern Ireland Court of Appeal (Patterson v Castlereagh Borough Council) suggests that voluntary overtime may – in some circumstances – have to be included in holiday pay calculations.

The Northern Ireland Court of Appeal has just held that there is no reason why voluntary overtime cannot be part of an individual’s normal working week and therefore could be included in holiday pay calculations.

This will be bad news for many employers and in Scotland there are now 21,000 holiday pay claims in the Scottish Tribunal system alone. [Law-Now]

Whilst I am sure may employees will welcome the decision, this will surely lead employers to reconsider whether using contractors would be cheaper? No Holiday Pay, No Auto Enrolment Pension, No Redundancy or Statutory Pay

Many already predict that by 2020 50% of workers will be self employed!

steve@bicknells.net

What are Directors Emoluments?

Businessman With Gold Bar

The reporting requirements are set out in The Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008, obviously emoluments include:

  1. Salary
  2. Bonuses
  3. Compensation for Loss of Office
  4. Benefits
  5. Share Options
  6. Long Term incentives
  7. Pensions

But it can also include payments made via other companies for ‘Qualifying Services’, these are payments paid in relation to the Directors services as a Director of the reporting company (Section 8, Part4, Paragraph 17).

In many cases this could be obvious for example if the Director used a Personal Service Company (PSC) or if the director invoices the company for management services or for management charges. But often invoices relate to the supply of products and services which don’t fall within qualifying services.

Its worth noting that unquoted companies with less than £200k for Directors Emoluments are not required to report details of the highest paid director.

Its also worth remembering that any related party transactions should be fully disclosed in the related party note, so is further clarification of what should be emoluments needed?

steve@bicknells.net

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