One in five businesses say holiday pay ruling will cost them more than £100,000

A landmark PSNI ruling over holiday pay has repercussions for businesses. Picture by Dominic Lipinski, Press Association

ONE in four businesses have already faced pay claims just months after a landmark holiday pay case, according to a new survey.

Of 135 businesses surveyed in Northern Ireland across the public and private sector, around 25 per cent said they had already received a notice of a claim in the wake of the PSNI ruling.

And more than one in five businesses estimate the cost of miscalculated pay will be in excess of £100,000.

Of the businesses surveyed by workplace compliance specialists Legal Island, more than half acknowledged they need to recalculate holiday pay.

In June, the Court of Appeal upheld a ruling that PSNI staff were owed money for a pay shortfall dating back to 1998.

Holiday pay was only based on basic pay and did not include overtime.

The force is now facing a £40 million bill. The PSNI is appealing the ruling, which Chief Constable Simon Byrne said had "significant repercussions right across the public sector".

According to the Legal Island poll of businesses, carried out last month in conjunction with Belfast law firm O'Reilly Stewart Solicitors, 80 per cent of respondents said their employees regularly work overtime.

Director and head of employment at O'Reilly Stewart Solicitors, Seamus McGranaghan, said he expected more pay claims to be made.

"Firstly, I think we can safely say that 22 per cent of businesses expecting to have to pay compensation of over £100,000 is significant – employers are waking up to the potential liability they face, the repercussions for their businesses but also the potential knock-on impact on our already fragile economy," he said.

"I'm slightly surprised that only 25 per cent have to date raised the issue of compensation with their employer. In my view this figure is only going to rise."

Scott Alexander, head of training and development at Legal Island, said: "Over the last number of years holiday pay has been one of the key topics of interest in employment law and continues to be a very complicated and controversial subject, as case law develops. There is no sign of that abating soon."

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