Voluntary overtime may have to be included in holiday pay – but watch this space…


In White and others -v- Dudley Metropolitan Borough Council 2016, a Tribunal has held that voluntary overtime could be considered part of an employee’s normal pay for the purposes of calculating holiday pay, if it is undertaken with sufficient regularity.
This case concerned tradesmen who were regularly invited to work on Saturdays or to go on standby to deal with emergency call-outs. They were not contractually obliged to undertake this work; it was purely voluntary. The judge held that this system had been in place for such a period and with such regularity that it had become part of their normal work and accordingly part of their normal pay. The consequence of this was that the work had to be included in the calculation of holiday pay for the first 20 days of annual leave (the statutory entitlement under regulation 13 of the Working Time Regulations).
This is only a first instance decision and causes a good deal of uncertainty. There is no guidance yet on what will constitute ‘sufficient regularity’.
This case follows on from the decision of the EAT in Lock -v- British Gas 2016 in which it was held that results-based commission should be included in statutory holiday pay, and Fulton -v- Bear Scotland 2015 in which the EAT held that non-guaranteed overtime should also be included. Lock is due to be heard by the Court of Appeal in July. The claims in Bear Scotland were dismissed after being remitted to the Tribunal, but permission to appeal has been sought.

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