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Guaranteed overtime, which the employer is obliged to provide and the employee must work.2.Non-guaranteed overtime, which the employer is not obliged to provide but the employee must work if it is offered.3.The case was to be heard with the appeal of another decision, , in which the Employment Tribunal had decided that voluntary overtime should also be included in holiday pay.

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Previously, employers had feared that they may face massive historic liabilities since there did not appear to be any limitation on how far back claims for an unlawful series of deductions from pay could go.

This could leave businesses faces claims going back to October 1998 when the WTR came into force. It concluded that there could not be a break of more than three months between any of the unlawful deductions in a series, otherwise the chain would be broken.

It is also easy to see the increased complexity and payroll costs employers will face.

The EAT decision is has brought some welcome relief to businesses in this respect.

This decision appears to severely limit the scope for workers to bring backdated claims for underpaid holiday.

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