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Employment A-Z

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Working Time - Holiday Pay

Elms v Balfour Beatty Utilities Solutions Ltd ET/2404322.2012 & ET/2400159/2013

Holiday Pay should be calculated on basic pay only.

E worked as a general operative for a gas supply contractor BBUS who needed staff available around the clock to be called out to deal with gas supply problems. E's written statement of terms and conditions and his actual working pattern differed dramatically. His written statement provided for 47.5 hours plus a reasonable amount of overtime. In practice E worked 40 hours but was paid for 47.5 hours (assumed to be compensation for the unsocial hours he actually worked) plus he regularly worked overtime, received a standby allowance for each weekday shift and received task completion bonuses.

E claimed BBUS made unlawful deductions from his wages contrary to WTR98 by not taking into account his overtime, bonuses and standby allowances when calculating his holiday pay.

The ET, following the Court of Appeal decision in Bamsy that 'normal working hours is the minimum number of hours that a worker is required to work under their contract of employment, excluding extras such as overtime', ruled that E's normal working hours were 40 per week.

E tried to rely on Williams v British Airways PLC but the ET rejected this as it was determined under Civil Aviation legislation and not the WTR that provide a statutory scheme for working out a week's pay.

The ET stated that E's frequent overtime did not negate the fact that he has 'normal working hours'/ No minimum overtime was fixed and overtime was not guaranteed. S 234 of the ERA96 specifically excludes overtime from the calculation of holiday pay. The ET ruled that E's holiday pay should be based on the basic pay that he receives for a 40 hour working week and does not have to include bonuses (discretionary and non-contractual), standby allowances (paid only when he works that unsociable hours shift) or the non-contractual overtime.