Good morning, generally it has been accepted that the rate you get paid for holidays would depend on what your ‘normal working hours’ are and that would not always be based on ALL the hours you worked with the employer.
When it comes to including overtime hours in the calculation of holiday pay, traditionally only guaranteed overtime would count towards your ‘normal’ working hours.
This was initially confirmed in the case of Crossland, where a worker argued that he should be entitled to holiday pay based on "average hours worked per week", which meant overtime hours as well as basic hours. However the court rules that where there are normal contractual hours of work but overtime or additional hours MAY be worked and is not guaranteed, statutory holiday pay is calculated with reference to the contractual hours only.
However, recently there have been decisions which have challenged this and which have suggested the opposite may be true. For example, in Neal v Freightliner Ltd it was decided that overtime hours should be included in the calculation of a worker’s average pay for holiday purposes. The issue is that all recent decisions are based in the Employment Tribunal and have not gone higher through the legal system, meaning that they are not legally binding. So whilst you can raise this argument based on these, they are not law as such and if the employer refuses to accept this then the only way to challenge them is to take them to a tribunal yourself and convince them that your argument is the legally correct one.
Thanks for your answer Ben. I had taken some holiday time while I was at the firm and the agency are saying that they had calculated my holiday hours on the total number of hours that I'd worked including my overtime. They have now decided that that was wrong and have deducted the 'overpayment' from the additional overtime I should have been paid making the payment they still owe me considerably less.
An employer is legally allowed to deduct any genuine overpayments from your wages without your consent, so the issue is whether these were overpayments or not and that would depend on the interpretation of the law which I explained above, which unfortunately is a grey area and does not give you a straight answer. There are unfortunately many such areas in law where there are court decisions that have gone either way and it is simply impossible to say with certainty what your rights are and the only way to challenge it would be to take your own case to a tribunal. It certainly does not stop you from challenging the employer directly and using some of the above arguments in your defence but if they simply refuse to acknowledge this and rectify the situation, all you can do is take it to the tribunal
OK. Thanks for your time Ben. I will make an agreement with them.