Employment tribunal finds voluntary overtime should have been included in calculation of statutory holiday pay

Christopher Sing, Freeths, Nottingham

The case of Brettle v Dudley Metropolitan Borough Council had five lead claimants (in a group of 56) bringing claims for unlawful deductions from wages in respect of under paid holiday pay. The claimants contended that voluntary overtime, voluntary standby allowance and voluntary call-out payments should have been factored into holiday pay calculations. The five employees worked various shift patterns, with different degrees of regularity to the overtime worked. One employee worked voluntary overtime once in four weeks, another every one in five, another less frequently. The employees took part, with different degrees of regularity, to rotas where they had to be on standby and could be called out. The tribunal relied upon previous case law to find that what is normally received constitutes “normal pay” and the regularity and consistency of the payments led the tribunal to conclude that they were intrinsically linked to the employment. Accordingly, the payments were to be included in calculation of holiday pay. The out-of hours standby, call-out allowances and overtime were in relation to voluntary work. However, failing to include them in holiday pay where a worker received them consistently and regularly might deter a worker from taking that leave. Although the rotas in question were voluntary, once an employee’s name was on the relevant rota, they were required to attend the workplace (or in the case of standby, be available). So the payments were intrinsically linked to the work required to be done under the contract by the worker. With regard to additional voluntary overtime, where overtime was regularly worked, this was included in normal pay. In one claimant’s case, overtime was very rare so should not be included in normal pay. These additional elements of pay only had to be factored into the calculation of holiday pay for the first four weeks of statutory annual leave. The additional 1.6 weeks’ leave provided by the UK’s Working Time Regulation, and any additional contractual leave, need not take into account such overtime. This is a first instance tribunal decision so is not binding on other employment tribunals. It is nonetheless consistent with other holiday pay cases relating to non-guaranteed overtime and commission, which is that any holiday pay should mirror the pay that is normally received by the worker.

Christopher Sing
0845 017 1345