Lawyers warned us that changes to holiday pay would be an expensive ruling, and lo, it came to pass.
The John Lewis Partnership, which includes the eponymous department store and Waitrose, will have to stump up an additional £12m each year to cover costs relating to pension, bonuses and National Insurance.
“The majority of these costs will be incurred in Waitrose where paid overtime is more usual than in John Lewis,” JLP said.
It will also have to shell out a one-off £10m for the current financial year, of which £7m covers pension liabilities, with the back payment for holidays taken since November 1 totalling £3m.
Director of personnel Tracey Killen said: “The John Lewis Partnership has acted promptly to change its pay practices in response to the Employment Appeal Tribunal (EAT) ruling. We believe our approach is a fair and practical outcome for our partners in light of this decision.”
At the time of the ruling, business groups warned it could have serious repercussions for industry, particularly smaller firms, which could be liable for “billions”.
Simon Walker, director general of the Institute of Directors, said:
The holiday pay time-bomb could have a hugely detrimental impact on businesses up and down the country. It is not an exaggeration to say that some small businesses could end up being wiped out if employers who have acted compliantly and in good faith face underpayment claims backdated as far as 1998.