We’ll all count the cost of the overtime holiday pay claims

The Employment Appeal Tribunal ruling could destroy any chance of an economic recovery

Sometimes you really do wonder if the lunatics have taken over the asylum.

This week’s ridiculous ruling by the Employment Appeal Tribunal to allow those working overtime to claim extra holiday pay and worse, allowing them to backdate any claims they might have by up to 16 years had me considering whether I should invest in the manufacture of straitjackets given that there are so many crazies in charge.

Honestly, what is that they don’t get?

After years of recession and being battered by banks, of just scraping by for employers and employees alike, of financial blight and depression which saw many businesses go to the wall, along come the EAT with a judgment which, like their acronym, suggests it could eat up any confidence in the future and slim chance firms had of surviving.

It’s no wonder The Federation of Small Businesses are up in arms about it, predicting thousands of jobs losses and business closures.

Some estimates are predicting up to five million employees benefiting from this ruling, though Unite, who brought the action, are saying the figure will be a lot less given it only concerns those who are or were contracted to do overtime and not those who volunteered.

No matter, it is an absolute shocker and whether it’s one million or five million benefiting, the costs to the employer will be astronomical. Billions could be end up being awarded through retrospective claims and that, I’m afraid, is nonsensical in this current economic climate. It may well see those claiming end up out of a job and struggling on benefits.

It’s the business equivalent of the banks’ PPI and Libor claims, the difference being that the banks were able to put money aside to pay out when their dodgy practices were uncovered, whereas no employer I know has or can do the same.

Equally the banks knew they were breaking the law but in this matter, where an interpretation of the 1998 European Time Directive is at the core of the dispute, neither employers nor Government did.

It is, as Chief Executive James Phillips of IT firm Excalibur said, like trying backdate speeding fines once a speed limit has been changed from 50mph to 30mph.

For the sake of sanity and reason this judgment has to be overturned at the next appeal at the Supreme Court. Sense has got to be seen. Unite must surely see that this action, if forced through, will do anything but unite people or businesses and cause nothing but irreparable harm.

It’s not the Dark Ages anymore. Work practices, protection for workers, wages and conditions for employees have all improved to the point that they are unrecognisable to those that were in place when I was learning a trade.

Minimum or living wage. Sick pay. Maternity pay or the one that has me tearing my hair out, paternity pay. They can still be improved upon, but this is a ridiculous penalty, especially the retrospective holiday award, which employers should not be forced to pay.

Because if they are, thousands of eligible workers could end up claiming on a permanent vacation the dole!