Call us on
0161 941 2426

Holiday Pay to Include Voluntary Overtime

Posted On: 18/08/2017

In the recent case of Dudley Metropolitan Borough Council v Willetts and others EAT/0334/16 the Employment Appeal Tribunal (EAT) held that voluntary overtime should be included in ‘normal’ remuneration for holiday pay calculations.  Previously it was only regular, but not voluntary overtime, that was to be included in holiday pay calculations.   

The workers in this case are employed as electricians, plumbers, roofers and operations officers.   They have set contractual hours and work entirely voluntary additional overtime and on-call work.   

Dudley Council stated that overtime pay was not ‘normal’ remuneration as it lacked an intrinsic link to the performance of tasks required under the contract of employment.  However, the EAT rejected this view on the basis that when staff were working overtime they were performing the same tasks as they do during their normal working hours. They added that to discount these payments from holiday pay calculations results in a financial disadvantage which may deter workers from taking annual leave. 

This ruling now means all types of overtime, including voluntary, must be included when calculating a worker's statutory holiday pay entitlement, with the exception of overtime that is only worked on a genuinely occasional and infrequent basis. 

The EAT also decided that regular out-of-hours standby payments and call-out allowances should be included in holiday pay. 

In summary, workers should usually receive the same pay while they are on annual leave as they normally receive while they are at work. Therefore, we advise that your holiday pay calculations are amended to include:  

Get In Touch

What Our Clients Say

“"Since using P3PM I have found that they have been keen to understand how our business operates in order to tailor the HR Services to our needs and requirements. It has allowed me the opportunity to have additional support for more complicated HR situations." ”

P Knight - CEO

Read Our Latest Blogs

Election Outcome & Changes to Employment Law

Posted On: 20/01/2020

We start 2020 with some certainties. We know Boris Johnson won the election and that his party will ‘Get Brexit done’ at the end of the month. However, many questions remain unanswered;

Read More > >

What Do The 2020s Have In Store For the Workplace

Posted On: 08/01/2020

What words pop into your head as being the most significant for 2019? Obviously ‘Brexit’ will feature high up on that list. Perhaps ‘change’, ‘unrest’ and ‘rethink’ come to mind too. Last year;

Read More > >

Subscribe to our HR News updates

Get the latest updates from P3 and great advice on how your HR can be improved.

To Top