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Holiday pay: Holiday pay must be 'true addition' to contractual rate of pay

This report relates to 1 case(s)

Key points

In Smith v AJ Morrisroes & Sons Ltd and other appeals, the EAT holds:

  • The guidelines set out by the EAT in Marshalls Clay [2003] IRLR 552 require that "there must be mutual agreement for genuine payment for holidays, representing a true addition to the contractual rate of pay for time worked." This is evidenced by a refined version of the factors set out as guidelines (a) to (e) in para. 37 of the Marshalls Clay judgment.