Holiday pay and voluntary overtime


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The Employment Appeal Tribunal (EAT) has held in Flowers v East of England Ambulance Trust that the claimants were entitled to have voluntary overtime included in their holiday pay calculations.

The claimants performed various roles in the ambulance service, and brought tribunal claims alleging that the calculation of their holiday should take into account non-guaranteed overtime (periods when the claimants were obliged to work after their shift had ended in order to complete whatever task they were doing) and voluntary overtime. At first instance the tribunal held that they were entitled to have non-guaranteed overtime taken into account under their contracts but not voluntary overtime.

The EAT held that normal remuneration must be maintained in respect of a period of annual leave, and that payments during annual leave must therefore correspond to the normal remuneration received while working. In order for a payment, such as voluntary overtime, to count as "normal" remuneration, it must have been paid over a sufficient period of time. The EAT also considered the claim as a matter of contractual entitlement. Under the NHS Terms and Conditions of Service, which were being considered in this case, relevant NHS employees also have a contractual right to have "regularly paid supplements" included in their holiday pay calculated on the basis of the previous three months at work. The intention of the NHS Terms and Conditions of Service was to maintain the overall level of remuneration which the employee would have received if working and therefore voluntary overtime was included.

Take note: The decision in Flowers agrees with that reached by the EAT last year in Dudley Metropolitan Borough Council v Willetts. Where voluntary overtime extends over a sufficient period of time of a regular and/or recurring basis and so can be considered "normal" it should be included when calculating holiday pay.

This article is taken from HR Law - August 2018.

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