Holiday pay

Q: We agreed to a change in our shift pattern two years ago in exchange for an additional payment of £20 per shift, but the extra pay has not been included in our holiday pay. Should it be?

A: The Working Time Regulations specify that holiday pay must be calculated in accordance with sections 221 to 224 of the Employment Rights Act 1996. The method of calculation depends on whether workers have “normal working hours” and, if they do, whether their pay varies according to the amount of work done or the time at which it is done.

If employees’ pay is the same every week, they should be paid that same amount for any week when they are on holiday (pro rata for part of a week); if their pay varies with the amount of work done, each worker’s holiday pay should be an average of his/her previous 12 weeks’ pay.

Since you receive the additional payment for every shift, this is part of your contractual pay; therefore it should be included in your holiday pay. In the case of May Gurney Ltd v Adshead & 95 others UKEAT/0150/06, the EAT held that a fixed attendance payment (of either £10 or £8 for working a full week) was a compulsory element of the claimants’ pay and should be included in their holiday pay. Your situation is similar.