UK business chiefs attack holiday pay ruling Business leaders attacked a tribunal ruling on Tuesday that gave millions of UK workers the right to extra holiday pay . John Cridland, head of the CBI, the business lobby group, said employers felt "anguish" at the decision. "Goal posts are simply moving here," he told the Financial Times. We've got mission creep. But despite protests from industry, lawyers said the holiday pay decision would have a much smaller impact than business had initially feared. It strictly limits the scope for historic payouts, meaning companies will not face a massive wave of backdated claims. The ruling will, however, mean higher costs for business, employers" groups said. More than two-thirds of manufacturers estimate that the changes will add more than 3 per cent to their payroll costs, according to research by EEF, the manufacturers" organisation. On the other hand, the decision could boost the wages of about 5m workers, before a general election where low pay and the question of who benefits from the UK's economic recovery is poised to shape the political debate. Tuesday's employment appeals tribunal backed the decisions in three earlier cases that employees should have had regular overtime factored into their holiday pay. However, the tribunal ruled that employees could not claim underpayments had been unlawful if a period of three months or more had elapsed since the leave had been taken. Ed Goodwyn, employment law partner at Pinsent Masons, said the ruling was a "one-all draw." He added: "For the future the employees have won: employers are clearly going to have to pay more for holiday." But he also said the risk of backdated claims had been "holed below the waterline." Employers expressed concern before the case about the potential for backdating, potentially as far back as 1998, and warned that such a decision could "wipe out" some small businesses. "The silver lining in the cloud is that they've limited the retrospective element," Mr Cridland said. Under UK legislation, holiday pay has been calculated on an individual's basic salary. But rulings in the European courts have indicated that it should be based on "normal" salary. However, this applies only to the proportion of an employee's holiday that is mandated by EU law, four weeks, raising the prospect that different rates of holiday pay could apply to different parts of an individual's annual leave. Businesses warned that that would be an administrative nightmare. Howard Beckett, director at legal services at the Unite union, which backed the claim, said until now "some workers who are required to do overtime have been penalised for taking the time off they are entitled to. This ruling not only secures justice for our members who were short changed, but means employers have got to get their house in order. Vince Cable, business secretary, said the government was setting up a task force to discuss how to limit the impact of the ruling on business. It would be a straightforward addition to the cost of employment and that would be unwelcome Peter Birtles, industrialist "Government will review the judgment in detail as a matter of urgency," he added. Ministers estimate that about 5m employees, a sixth of Britain's 30m working,people, get paid overtime. Other cases are due to come before the employment appeals tribunal this year that will test whether commission payments, such as those made to sales staff, also need to be taken into account. Tuesday's ruling could have a particularly significant impact on heavy manufacturing sectors, such as steel, which frequently pay employees to work overtime. Peter Birtles, an industrialist in the North of England, said the cost would be significant for his business. It would be a straightforward addition to the cost of employment and that would be unwelcome. It's not a good time to be introducing such a move. A better time to do it would be when the world is a bit more buoyant," he said. However, Tim Thomas, head of employment policy at EEF, said the "single biggest concern" had been a potential raft of backdated claims for which companies had no provision. There could be appeals against the decision, possibly to both the European and domestic UK courts, meaning a final ruling could be years away.