Autem vel eum iriure dolor in hendrerit in vulputate velit esse molestie consequat, vel illum dolore eu feugiat nulla facilisis at vero eros et dolore feugait

Holiday Pay: voluntary overtime

There has been a number of recent cases which have examined the issues surrounding holiday pay. A claim often made by employees’ is that the voluntary overtime they work should be included in the calculation of their holiday pay. The recent decision in ‘Dudley Metropolitan Borough Council v Willetts’ provides us with some clarity in respect of the issue.  

In this particular case, a set of traders including ‘Mr Willets’ had fixed contractual working hours, upon which basic pay was calculated, however, they all had an opportunity to work voluntary overtime. Examples of these were out of hours standby and a call out allowance. 

Thus, the employees, as well as working their set contractual hours, also took part in voluntary overtime. In return for the voluntary overtime they were given remuneration which was added onto their monthly wages. However, holiday pay was based on basic pay only. 

Mr Willets argued that his holiday pay should be calculated based on his basic pay plus voluntary overtime. 

The Employment Appeal Tribunal (EAT) ruled that the voluntary overtime should have been included as part of the calculation for holiday pay. It was held that the traders were performing the voluntary overtime regularly which therefore should class it as normal remuneration. The company, by excluding the voluntary overtime from the holiday pay, were financially disadvantaging its employees.  

Following the ruling of the case, sectors which provide opportunities to work voluntary overtime, should review the way they calculate holiday pay, ensuring that voluntary overtime is included in the equation. 

Here at SCE Solicitors, we like to keep you up to date with recent case law developments to bring you real life examples which you can apply to your business. If you have any queries about your overtime and holiday pay policies, or any other employment law issue, please contact me on 01133 50 40 30 or at hello@scesolicitors.co.uk.

If you would like to be kept up to date with employment law and dispute resolution updates, please subscribe to our monthly newsletter.

SCE Solicitors is a boutique employment law and dispute resolution practice based in Leeds which advises clients nationwide.  Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here.

Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

%d bloggers like this: