In a landmark case on 4 November the Employment Appeal Tribunal ruled that staff mandatory overtime should be included in holiday pay calculations.

The judgment came from two joined cases – Hertel (UK) Ltd v Mr Wood & others; and Amec Group Ltd v Mr Law & others – and could now lead to employees claiming and winning payouts for underpayment of holiday pay based on incorrect calculations.

The 16 Unite members in the action, a mix of electricians, scaffolders and semi-skilled operatives, worked on a project at the West Burton power station site in Nottinghamshire until it came to an end in 2012.

Unite said that during that time their members were required to work overtime and received payments for travel time.

Payments for that work were not included in holiday pay, meaning that the workers received considerably less pay when on holiday, compared with when they were working. It added that the ruling would affect the haulage industry.

John Cridland, CBI director general, described the ruling as “a real blow to UK businesses now facing costs potentially running into billions of pounds” .

Law firm Veale Wasbrough Vizards warned that other claims may follow. Company solicitor Mark Stevens said: “The Employment Appeal Tribunal decision will need to be considered carefully before firm advice can be given on the subject.”