June 17, 2019
The law in relation to holiday pay and how it should be calculated has undergone a number of developments over the last 18 months. Another case has now been considered, this time in relation to voluntary overtime and the impact that should have on calculating holiday pay. In East of England Ambulance Service NHS v Flowers the Court of appeal has confirmed that voluntary overtime should be included in holiday pay calculations if the employee receives regular and settled payments.
A group of employees working for the NHS brought a collective claim to the Employment Tribunal for unlawful deductions from their wages. They argued that the calculation of their holiday pay failed to take into account both compulsory and voluntary overtime. They believed they had a contractual entitlement to have all overtime included in holiday pay under the terms of and conditions of service with the NHS and the requirement to include overtime under the Working Time Directive.
The Court of Appeal found that the NHS employees did have an entitlement for overtime to be included in holiday pay under their terms and conditions and voluntary overtime should be included in holiday pay if the pattern of work is sufficiently regular and settled for payments made in respect of it to amount to normal remuneration.
What to take from this case
Whilst the Court of Appeal have confirmed that voluntary overtime should be included in holiday pay where the overtime is “sufficiently regular and settled” there is still greater clarity needed on what will be classed as “sufficiently regular and settled”. It is likely that this will be assessed by the Employment Tribunal on a case by case basis.