Voluntary overtime should be included to calculate holiday pay

The Employment Appeal Tribunal in Flowers v East of England Ambulance Trust held that a clause in the NHS Terms and Conditions of Service that stipulates holiday pay should be calculated on the basis of what an employee would have received had s/he been at work, gives employees the contractual right for those payments relating to non-guaranteed and voluntary overtime to be included in the holiday pay calculation. It does however remain the case that voluntary overtime must be undertaken sufficiently regular to count as normal remuneration and therefore to be included in this calculation. The case has been remitted to the Employment Tribunal to determine the point of what amounts to “sufficiently regular” and permission to appeal has already been submitted to the Court of Appeal.

In this case a clear distinction was drawn between “non-guaranteed” and “voluntary” overtime. The former being a mandatory requirement to complete an unfinished task and the latter being purely voluntary, with the requirement for the employee to put their names forward for additional hours. In reaching its decision, the Employment Appeal Tribunal made specific reference to Dudley Metropolitan Borough Council v Willetts, a first instance decision in the Employment Tribunal, which introduced the concept of including voluntary overtime into the calculation of holiday pay, provided it was undertaken for a sufficient period on a regular and/or recurring basis. Hopefully the outcome of this case will bring more clarity to what is deemed to be sufficiently regular.

If you have any questions relating to this article or require any advice, please contact Ailsa Hobson Associate in the Employment team, on 0191 226 3705 or at ailsa.hobson@sintons.co.uk.