P REMUNERATION
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How do I calculate staff holiday pay?
We employ some drivers on the night shift for which they receive a shift allowance. They also drive across to mainland Europe and we pay them overnight subsistence and expenses. They have asked for their holiday pay to include their shift allowance, overtime and subsistence/expenses based on the last 16 weeks or so. Is this right?
For the calculation of holiday pay, you must include their shift allowance. But you don't have to include overtime, subsistence or expenses as they are not part of their weekly wage as such. Only overtime explicitly de scribed as guaranteed in their contracts of employment has to be included in their holiday pay. Overnight money and out of pocket expenses are treated separately, and must not be included in holiday pay calculation. And finally, the calculation period is 12 weeks.
Appropriate law is the Working Time Directive 1998 as amended.
British Airways was told by the Employment Appeal Tribunal in 2005 that its practice of reducing workers' shift pay by 4/52 before making a payment was unlawful as the purpose was to prevent employees receiving shift pay in respect of weeks when they were on holiday.