Farming and estate business that rely on their staff to work overtime could be affected to some degree by the Employment Tribunal’s ruling yesterday that holiday pay should not take into account just basic pay.
The UK has operated a system since 1998 whereby holiday pay was paid at the basic rate. Now, subject to a possible appeal, that will have to change.
Mike Harrison, Partner in the Landed Estates and Rural Business Group of top 20 Chartered Accountant Saffery Champness, says:
There will be some impact on businesses where overtime is a regular feature of their operations, and, if claims for underpayment of holiday pay can be backdated, then this could cause some difficulty. Employers may also restructure to make less overtime work available.
However farming has tended to operate a fairly liberal regime around overtime and I suspect that for smaller concerns there are unlikely to be severe consequences. It may lead to farming businesses reviewing their payroll arrangements and implementing salary-based payments, but they need to be sure however that these comply with minimum wage requirements where appropriate.
