13 July 2015

Voluntary overtime in holiday pay: it may need to be included

This article was written by Stephanie Compson (associate).

We have been regularly reporting on the ongoing saga of holiday pay claims following the decision in Bear Scotland v Fulton and others, which determined that statutory holiday pay should also include non-guaranteed overtime (i.e. overtime which the employer does not have to offer but that the employee is obliged to work if it is required). 

However, the decision in Bear Scotland left many questions unanswered, including whether voluntary overtime (where there is no obligation on either the employer or employee) might be included in holiday pay. 

The recent case of Patterson v Castlereagh Borough Council, brought in Northern Ireland, has now directly addressed whether voluntary overtime should be included in statutory holiday pay.  

The Northern Ireland Court of Appeal ruled that there was no reason as a matter of principle why voluntary overtime should not be included in the calculation of statutory holiday pay: that it would be a question of fact for each tribunal to determine whether or not voluntary overtime is “normally” carried out by a worker so as to justify its inclusion. They remitted the case to the first instance Tribunal to consider whether that was the case here.

So – what can employers take away from this case? Well, not much at this stage.  The Court did not rule out the inclusion of voluntary overtime – but nor did they indicate in what circumstances they would rule it in.  The first instance Tribunal will need to reach a finding on the facts - and this could lead to more useful guidance.

It is also worth noting that the decision made by the Northern Ireland Court of Appeal is not binding in England and Wales.  The fact that Northern Ireland has potentially opened the door to the inclusion of voluntary overtime could nevertheless be influential on how the Courts in the rest of the UK are going to approach the law on this issue.   

However, somewhat unhelpfully, the Court of Appeal in this case indicated that their ruling should be viewed with caution, as they felt the arguments had not been fully made before them.  

Unfortunately it seems that clear guidance on this issue continues to be in very short supply.  We will continue to keep you updated but, for now, the saga continues.

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