How can changes in holiday pay can affect business?!
According to estimate reports there are around 5 million people that get paid overtime or on commission bases, which means they should be entitled for more holiday pay. At the moment holiday pay for an employee is calculated on their fixed income without overtime and commission. A spokesman for the Department of Business, Innovation and Skills said: “the government wants to get the right balance between the needs of employers & employees”.
Possible changes in employment law that will have impact on holiday pay may cause number of disturbances. As millions of workers are depending on overtime or commission payments on top of their fixed salary and once they discover that they are authorised to additional holiday pay it could lead to the floodgates to a new round of backdated financial claims on the scale of the scandal surrounding this misspelling of Payment Protection Insurance (PPI).
There is a fear that businesses will face huge pay-outs if employment tribunal’s decision will be in employees favour not employers.
Judgement can be appealed to the court of Appeal this Tuesday. The employment Appeal Tribunal will rule on the Bear Scotland vs Fulton and two other cases Amecv vs Law and Hertel vs Wood or it could refer to EU court in Luxemburg.
Consequences
“The holiday-pay time bomb could have a hugely detrimental impact on business up and down the country,” said Simon Walker, director general of the Institute of Directors.
“It is not an exaggeration to say that some small businesses could end up being wiped out if employers who have acted compliantly and in good faith face underpayment claims backdated as far as 1998.”
He added that employees would be encouraged to apply for holidays after working a lot of overtime, leading to “an administrative nightmare” for companies.
“It seems extremely unfair that businesses who have tried to do the right thing – getting the best legal advice at the time – could be hit with a bill which no one knew was coming,” said the groups national Chairman Allan.
The biggest threats from backdated claims could impact about 400,000 firms in the UK.
Information source: www.bbc.co.uk