Impact of holiday pay ruling

The Employment Appeal Tribunal (EAT) recently passed a landmark judgment to include overtime in holiday pay. The decision will see elements of compensation such as overtime and commission included in the calculation of holiday pay - with potential to make backdated claims in some cases. The ruling could affect up to 5 million workers and is thought to have widespread implications for companies where staff are required to do overtime as a regular part of their job.

Employers groups have suggested that UK businesses could stand to lose billions of pounds in higher wage bills, and companies could react by holding back pay rises. A recent survey of business owners by Sage showed that two-thirds did not agree with proposed changes to the way holiday pay is to be calculated.

However, unions argue that low-paid workers in particular rely on overtime to top up their salary, so it should be included in holiday pay. Howard Beckett of Unite who brought the claim said that some workers who were required to do overtime have been penalised for taking the time off that they are entitled to; “this ruling not only secures justice for our members who were short changed, but means employers have got to get their house in order.”


NHS workers stage four-hour strike

NHS workers, including nurses, midwives and ambulance staff, staged a four hour strike in England as part of their ongoing pay dispute with the government. Members of 11 unions will walk out for four hours in protest at the coalition’s decision not to accept a recommended 1 per cent wage rise for all NHS employees.

Members of the Royal College of Midwives went on strike this year for the first time in 32 years. Cathy Warwick, their chief executive insisted that “the public are behind us.” However, a Department of Health spokesman said that the Government could not afford a combined pay rise without jeopardising 10,000 frontline jobs.

This comes as the Welsh government, unions and NHS employees agreed a Wales-only NHS pay deal, where 77,000 staff were offered a two-year deal which includes a cash payment of £187, a 1 per cent wage increase from April 2015 and the Living Wage for all Agenda for Change staff. The minister for Health and Social Services in Wales, Mark Drakeford said: “this is an excellent example of working collaboratively...and in Wales we have been able to avoid significant strike action by agreeing a mutual position…”

Additionally, members of the Fire Brigades Union (FBU) and Unite union at the Defence Support Group also staged a four day strike action in a row over pensions and 1 per cent pay increase respectively. 


Low-paid workers trapped in poverty

The latest data from Office for National Statistics showed that pay growth excluding bonuses outpaced inflation for the first time in five years, showing the squeeze on wages may be easing.

However, a recent report by Joseph Rowntree Foundation found that record number of working families are in poverty due to insecure, low-paid jobs, with two-thirds of people who found work in the past year taking jobs for less than the living wage.

A report by the Resolution Foundation also found that only one in four workers who were low-paid in 2001 went on to escape poverty and move on to higher pay. Individuals who worked part-time, or those who were disabled, older or a single parent were mostly on low-pay along with employees who worked in hospitality and sales industries.

Vidhya Alakeson, the deputy chief executive at the Resolution Foundation, said: “Britain has a long-standing low-pay problem, with over a fifth of the workforce in poorly paid jobs. But the limited opportunities for escaping low pay is just as big a concern as it has huge consequences for people’s life chances.”