Should voluntary overtime be included in holiday pay?
In Flowers v East of England Ambulance Trust, the Employment Appeal Tribunal looked at whether voluntary overtime should be included in holiday pay.
Employees should be paid their 'normal remuneration' when they take holiday. But is voluntary overtime 'normal' pay?
This case involved ambulance workers who worked different types of overtime. Sometimes they worked compulsory 'non-guaranteed' overtime at the end of a shift, to finish a task such as caring for a patient. They could also choose to work voluntary overtime if it was offered, but they didn’t have to. Their holiday pay was based on average earnings over the 12 weeks preceding their holiday. The employer didn’t include any overtime in their holiday pay calculations. The employees brought claims for unlawful deduction from wages.
The employment tribunal said that their holiday pay should include the non-guaranteed overtime, because it was a contractual obligation. They said voluntary overtime could be excluded because it wasn’t contractual and there was no pattern to it. It wasn’t 'normal remuneration'.
The EAT disagreed and said both types of overtime should be included in the calculation. The important question was whether overtime payments had been made over a sufficient period on a regular or recurring basis. Whether overtime payments meet this requirement is a question for the employment tribunal to decide, based on the evidence. The case was sent back to the tribunal for this factual assessment to take place.