For those hoping for a much needed holiday from cases about holiday pay, there has only been a short respite since the Supreme Court stated that it would not allow any further appeals in the Locke v British Gas commission case.
By way of reminder, the case of Locke (and the failure in any further attempts to appeal), has given us certainty that commission (and certain types of overtime) need to be included in the calculation of holiday pay. What it left behind were a number of questions around how such holiday pay should be calculated, and what the legacy rights may be.
We have now had the judgment from the most recent case on the issue of legacy rights in the Employment Appeal Tribunal's decision in the case of Fulton and others v Bear Scotland (which avid followers of holiday pay case law will note is the second EAT decision in this case – the first being the appeal which decided that certain types of overtime needed to be included in the calculation of holiday pay).
In this more recent EAT decision in Bear Scotland, the EAT has confirmed that legacy holiday pay claims are limited by any gap of three months between successive underpayments. Meaning that even where an employee successfully argues that they have been underpaid in relation to their holiday, they can only actually obtain a remedy / back pay in relation to holidays they have taken since the most recent three month gap.
This rule has a material impact on the value of any holiday pay claims as demonstrated by the case itself where four of the claims were held to be out of time and so no back pay could be awarded notwithstanding that holiday pay had been underpaid.
Whether or not this decision will be appealed we will have to wait and see. But in the meantime it provides certainty in relation to the calculation of holiday pay claims, in terms of what claimed holidays should be included in that calculation.
What it doesn't assist with is how the holiday pay itself is calculated for each and every holiday. In relation to that, we have continuing uncertainty – albeit that it is possible to produce a reasonable and sensible answer (which should be agreed by both sides) – in the vast majority of cases.
In relation to Brexit, some have said that they are waiting for it to provide certainty in the area of holiday pay. This is unlikely - if the Government's White Paper on the Great Repeal Bill is anything to go by, it will not provide the answers employers need - it will simply incorporate EU law into domestic law (together with all the unresolved questions it presents) as at the date the UK leaves the EU.