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Voluntary overtime and holiday pay

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Voluntary overtime and holiday pay

An employment tribunal has found that voluntary overtime and other payments associated with rotas worked voluntarily should have been included in the calculation of statutory holiday. Although this is only a first instance decision it adds to the current case law on holiday and pay and overtime.
In the case of Brettle v Dudley Metropolitan Borough Council a group action for unlawful deductions from wages was brought on behalf of 56 employees (“the Claimants”). Whilst the Claimants concerned received holiday pay, they argued that they had not received the correct rate. In particular, the argued that their holiday pay should have included payments in respect of voluntary overtime, voluntary standby allowances and voluntary call out expenses. The Claimants all undertook different amounts of voluntary overtime however they all undertook voluntary overtime with a degree of regularity.
The Claimants relied on the principles established in the Bear Scotland case, relating to guaranteed overtime and also raised the suggestion that in any event, these additional payments were actually implied contractual terms in any event. In reaching its decision the Tribunal considered the existing case law and determined that although there was no basis for implying a term that the additional elements of pay were, as a matter of contract, “normal pay” there was no reason why an employee should be deterred from taking leave on the basis that to do so would leave them out of pocket. The Tribunal therefore determined that voluntary overtime should be included within holiday pay calculations.
The Tribunal considered that although the rotas in question were voluntary, once an employee’s name was on the relevant rota, they were required to attend the workplace. The payments were therefore considered to be linked to the work required to be done under the contract by the worker and therefore eligible to be included within holiday pay payments.
As a non-binding tribunal decision, this case is of limited value. However, it is a useful illustration of the direction of travel. It can be no surprise really that the principles established in Bear Scotland relating to guaranteed overtime have been extended in this way to voluntary overtime. The case is due for a remedies hearing shorty and could possibly be appealed in due course.

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