Following the Employment Tribunal landmark ruling in November 2014 that non-guaranteed overtime pay should be taken into account when calculating holiday pay, John Lewis and Waitrose have been noble enough to lead the way resulting in a £22 million liability for the year. Many employers are hesitating to follow suit in view of the related future cost. It is interesting to note that in terms of past claims, there will be a 2 year limit in the Employment Tribunal on claims presented on or after 1 July 2015 for shortfall in holiday pay. But this must be brought within 3 months of the last in a series of deductions. Employers therefore have the headache of deciding what to do about potential past claims in addition to future holiday pay. One solution is to pay the correct amount of holiday pay which will break the series of deductions and start the 3 month time limit. With an estimated five million workers able to claim extra holiday pay, this will be a major issue for employers this year.
John Lewis and Waitrose staff are set to share a £22m extra bonus this year after an employment tribunal forced a change in the way all British companies calculate holiday pay.