Holiday pay and what you need to do in response to the BMA

The BMA has been contacting HR Directors at NHS Trusts following last week’s much heralded Judgment of the Employment Appeal Tribunal on holiday pay…

The BMA has been contacting HR Directors at NHS Trusts following last week’s much heralded Judgment of the Employment Appeal Tribunal on holiday pay in Bear Scotland v Fulton (about which we alerted last week).  Whilst that was a landmark Judgment which will require action from the majority of UK employers, it had initially appeared to be one about which employers in the NHS had less to be concerned.  However with the BMA demanding a response within 14 days and requesting back-pay for members for previous holiday years, all NHS employers need to be ready to consider your organisation’s position and quantify risk.

The issues for NHS bodies

The Bear Judgment itself was about employees who normally worked required overtime, but for whom that overtime was not included in their annual leave pay.  It also included a decision on allowances which were intrinsically linked to the work undertaken but not taken into account in holiday pay.  We believe that if NHS organisations are acting in accordance with previous NHS Employer’s guidance, these elements will already be reflected in annual leave payments.  

It is not immediately clear from the BMA what it is they believe is not being paid to their members or what payments their focus is upon. There might be local arrangements which need to be reviewed to see whether they are reflected in leave payments.  Other less usual payments, such as extra activity payments and those for extra activity clinics, may need to be considered.  However many of these will be paid for what is effectively voluntary overtime and, as we highlighted last week, whether this EAT Judgment extends to voluntary additional work is yet to be determined.  Importantly the decision also emphasised the need for annual leave pay to reflect what was paid for normal work, not exceptional or occasional ad hoc arrangements.

We also cannot at the moment see many implications for non-medical staff given what Agenda for Change says, excepting again possibly local arrangements.  The one obvious problem area with annual leave is bank staff,but whether or not they are affected is going to be heavily dependant upon how your bank is actually set up regarding holidays.  This problem will not be new to those of you who deal with bank arrangements and we have previously discussed these problems at our NHS breakfast clubs.  Those with substantive contracts who also work on the bank will need some consideration.

The one thing which NHS bodies should certainly not be doing in the light of the Bear Judgment is making payments for previous leave years.  It is somewhat surprising that the BMA have asserted that this should occur. The Judgment decided that a claim for holiday pay must be brought within three months of the deduction (that is the payment of that leave) or the last of a series of deductions - importantly being only where there is less than three months in between each failure to pay in full for the four weeks Directive leave.  That appears to have stopped employees claiming pay for previous leave years.  The decision distinguishes between the four weeks Directive leave, and any additional UK leave, removing a large proportion of generous NHS leave from the Judgment’s application.                      

What should I do?

In the light of the BMA’s approach it appears that a wait and see approach will not be one which works for NHS bodies.  The pragmatic solution to time-limits reached by the EAT in Bear has the side-effect that individuals must bring claims relatively quickly if they wish to do so, with the timescales depending upon their personal leave year and when leave is taken. This may prompt employees to lodge claims now pending the outcome of any appeal in the Bear case.

It is vital that each NHS organisation considers the potential implications associated with this and other recent cases, and decides whether interim measures need to be put in place. The first step should be to identify potential risks through a Holiday Pay audit. We can help with this.

We would suggest that we come out to meet with you and review your reward and annual leave arrangements.  At this meeting we will help you to assess any potential areas of risk and quantify those risks. If appropriate, we can then work with you on the next steps you should take in order to protect your organisation.  We are also able to defend any claims for you in a cost-effective way, including dealing with ACAS when the potential claims are raised as part of early conciliation.

If you have any queries about the issues raised in this update or if you would like to meet to discuss your holiday pay risks, please speak to your usual Weightmans contact or get in touch with Phil Allen on 0161 214 0504 (phil.allen@weightmans.com), Bernadette Worthington on 0151 243 9587 (Bernadette.Worthington@weightmans.com) or Emlyn Williams on 0151 243 9569 (Emlyn.Williams@weightmans.com).

Share on Twitter