Voluntary Overtime and Holiday Pay

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Last week saw another ruling in the series that we have seen over the last few years regarding how to calculate holiday pay.

In White & Others v Dudley Metropolitan Borough Council, a case bought on behalf of 56 tradesmen who on a purely voluntary basis, worked overtime on a Saturday and elected to go on a standby rota every four weeks. The presiding judge ruled that voluntary overtime, voluntary standby and voluntary call-out payments should be considered “normal pay” if it is sufficiently regular. In turn this means it should be reflected when calculating an employee’s holiday pay.

There are however, still unanswered questions surrounding what is ‘sufficiently regular’ and how the holiday pay should actually be calculated. This was only a preliminary ruling which established the principle that voluntary additional payments, if worked regularly enough, should be considered as normal pay.

However it is likely to pave the way for claimants to bring a claim that these should be reflected in their holiday pay.
At this point in time, there is no legal need for employers to change their current practices regarding voluntary payments and holiday pay, however, it is highly likely that in the near future they will be required to do so and therefore this should be planned into any budgets.

The calculating of holiday pay has become a complicated affair with the various Employment Appeal Tribunal and European court rulings. 

For more information please contact Anita Wynne at BestStart HR on 01438 747 747