Case law update Neal v Freightliner settles

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We have heard that Neal v Freightliner, one of the leading holiday pay cases, has settled. Whilst this development may give employers some temporary respite from the heat, the long-term forecast remains clear, holiday pay is going to cost you more.

A spate of recent case law shows how the UK is out of line with the EU requirements for calculating holiday pay, for more details see our previous HR briefing ‘Where are we with holiday pay'. Although the notorious case of Neal v Freightliner looks as though it has now settled at the last minute, the extent to which overtime must be included in holiday pay is still a live issue and there are plenty more cases of a similar nature waiting in the wings. Equally, the unions will be keeping up the pressure on business to re-calculate.

If you have already attended our seminar - 'Holiday and Pay – the end of the low cost holiday', you will appreciate that Neal v Freightliner was only one part of the picture. Other cases, such as BA v Williams and Lock v British Gas have clearly set out the direction of travel.

The various strategies discussed in the seminar and our seminar hand-out assessing which variable pay elements count towards holiday pay remain valid. The end of the Neal v Freightliner litigation may, however, give you a little more breathing space to gather the information you need to make an informed strategic decision about how to approach the holiday pay problem.

We have a meeting with government tomorrow to find out more details and their latest thinking on potential legislative amendments and will report back.

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Legal Compliance Lead

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