Drivers To Receive Up To £1,000 In Owed Pay

A lengthy holiday pay dispute between Eddie Stobart Ltd and over 400 of its drivers has been settled with a total of £364,000 being awarded to staff.
 
The dispute related to Eddie Stobart Ltd calculating holiday pay on the basis of ‘average pay’ which in this case meant basic pay plus a daily supplement.
 
Unite, the trade union representing 370 drivers, argued that the employees had allowances and overtime that would have contributed towards a higher rate of ‘average’ holiday pay.

The legal process started in 2011 and was settled before it reached court.

As of this month, all Eddie Stobart drivers will be getting the higher rate of holiday pay for the 28 days leave each year, which also includes statutory bank holidays.

Unite national officer for road transport Adrian Jones said: “We are pleased that this five-year old dispute has been settled, although we would have preferred that Eddie Stobart’s had agreed voluntarily to the higher rate of holiday pay rather than going through protracted legal wrangling.”   

Expert Opinion

“It looks as though Eddie Stobart Ltd had calculated holiday by reference to their workers’ basic pay which is in line with UK legislation, but not EU case law. It is likely that the amount these workers received varied depending on the amount of work they do, or when they do it and their holiday pay would have been calculated on the basis of their previous pay, averaged over the previous 12 weeks.

“However, they have now agreed that the holiday pay should reflect their workers’ normal pay including any overtime, enhancements and allowances in line with recent UK and ECJ decisions. The basic position is that payments that are intrinsically linked to the work or tasks the worker is required to do, should be included in the calculation of holiday pay. In other words, holiday pay should reflect a worker’s ‘normal’ pay.

“What is interesting is that Eddie Stobart Ltd has agreed to calculate all holiday payments in this way. The law only requires employers to calculate 20 days holiday per year in this way and employers are free to calculate any other holiday payments at basic pay. All employees are entitled to a minimum of 28 days holiday per year (pro-rated for part time staff) and therefore 28% of their holiday pay can be paid at a reduced rate.

“Holiday pay is an issue where EU law can be said to interfere with UK legislation. However if the UK does exit the EU, this is one area where the UK government might intervene. If it does, businesses that have already made changes to their holiday payments will not be able to reduce the terms and conditions of their existing members of staff , which have been expressly agreed or implied, without agreement. Forcing through detrimental changes is likely to cause real resentment and may drive employees into the arms of trade unions and ultimately into Tribunals.”
Glenn Hayes - Partner & National Head of Employment Law

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