Holiday Pay & Overtime
Thursday 16th August 2018
Heard in the EAT, Flowers and ors. V East of England Ambulance Trust considered the calculation for holiday pay and whether two types of overtime for ambulance workers should be included.
The Claimant ambulance workers have two types of overtime. The first is voluntary overtime, which is preplanned and paid for those covering staff shortages or holidays. The second is non-guaranteed overtime which is compulsory and not preplanned and is paid when a shift overruns (for example if an emergency occurs at the end of a shift). The Claimant’s argued that both should be factored into the calculation for their holiday pay.
The ET held in the first instance that whilst non-guaranteed overtime was contractual and thus part of the calculation, the voluntary overtime was non-contractual and this not be considered.
The EAT, reversing the ET’s decision, held that in addition to the contractual and this part of the calculation, the voluntary overtime was non-contractual and thus not be considered.
The EAT, reversing the ET’s decision, held that in addition to the contractual non-guaranteed overtime, payments for the voluntary overtime should be factored into the calculation, if such payments are so regular and recurring as to be normal and was paid over a sufficient period of time.
This case reinforces the now established ‘normal remuneration principle’; that voluntary overtime which extends over a sufficient period of time on a regular and/or recurring basis to be considered ‘normal’ should be included when calculating basic statutory holiday pay.
Employers should ensure that both contractual and voluntary overtime is factored into their calculation for employee’s holiday pay over the prior 12 weeks, if such overtime can be regarded as regular and recurring enough as to be normal.
It does appear that the NHS Trust in this case is seeking permission from the Court of Appeal to appeal this decision.
If you require any further information on the above developments please do not hesitate to get in contact with a member of the Employment Team.