6 November 2014

As we come to the end of the week, I’ve found myself writing the word ‘bureaucracy’ more times than I’d like to – and not only because it’s a pain to spell! Today is another one of those days, as I read about the latest ruling on holiday back pay.

piggybankPassed by the employment appeal tribunal, this ruling means that businesses have to calculate employees’ holiday pay based on their hours, including overtime. As a ruling, it doesn’t sound too bad; it’s important to pay people fairly and acknowledge the work they do. However, what I do find worrying is the demand that businesses must now work out and deliver back pay for employees who have taken a holiday in the last three months.

I’m sure this is a complete curve ball for many businesses, which have been playing by the book by not including overtime in holiday pay calculations. Suddenly, the goal posts have been moved and, whilst this might not be a bad thing moving forwards, having to look backwards is a huge distraction.

When you consider that smaller businesses might not have the money to fork out retrospectively, the anxiety many are feeling becomes understandable. What if they simply don’t have the resources needed to manage a mountain of back-dated claims?

Personally, I’m not surprised that government figures and business groups like the IoD are voicing their opinions about this ruling. In my opinion, this is yet another example of the union rocking the boat for British businesses despite running the risk of tipping out the very people they claim to be protecting. Surely there are better ways to achieve a fair balance.

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