Holiday pay conundrum resolved at last in Telefonica

Telecoms & Financial Services, Telefonica UK

Members in Telefonica are on course to finally start receiving holiday pay that truly reflects their actual earnings as a result of the company’s belated response to a three-and-half year old European Court of Justice ruling.

Ever since that ruling, in May 2014, the CWU has been pressing the company to implement the Court’s decision that holiday pay should include certain payments outside basic pay – including commission and allowances – which reflect an individuals ‘normal remuneration’ in the three months prior to annual leave being taken.

Intended to ensure that employees are not financially disadvantaged when they take annual leave, most of companies with which the union has recognition agreements have long-since embraced the principle established by the ECJ.

However, the CWU has long been frustrated at the delay in Telefonica, which has consistently refused to budge pending the outcome of successive appeals, all of which have ultimately reinforced the original ruling.

Assistant secretary Sally Bridge explains: “It was only after the final appeal after appeal after appeal in the Lock versus British Gas case was dismissed last year that Telefonica said it wanted to consult with over the terms of the holiday arrangements to be put in place…and even then it began citing ‘systems issue’ as another cause for delay.

”So while the belated implementation of these payments is extremely welcome, from the CWU’s perpective it only means that that from February our members will be receiving what we believe they should have been receiving for some considerable time.”

Details of the formula under which payments will be worked out can be viewed in Telefonica Briefing issue No. 001/2018 but, in short, a new Holiday Pay Adjustment (HPA) will be paid monthly for any holiday taken since January 1, commencing in February pay packets.

Despite CWU efforts to get HPA payments applied to all annual leave taken, Telefonica has only agreed to pay it on the first 20 days, in line with the letter of the law. The union has, however, persuaded Telefonica to take overtime worked in the preceding three month period in to consideration – something not all other companies do.

Sally concludes: “We’re disappointed that we haven’t been able to move the company a lot quicker – because, frankly, Telefonica has been pretty tardy in the way they have approached this. There’s no doubt that the, albeit late, implementation of HPA payments represents a significant step forward for our members – especially those on significant sales-related commission and bonuses.

“It means that when they go on holiday they can expect to receive pay that is broadly in line with what they would have received had they been working

“Unfortunately there’s nothing in law to allow us to seek any retrospective payments – but at least, moving forward, this brings to a conclusion something that has been a thorn in the CWU’s side for a very long time now.”

Telefonica Briefing issue no.01.2018 and a special guide explaining Holiday Pay Adjustments can be viewed here