In a recent judgment of the Court of Appeal, it has been established that regular voluntary overtime must be taken into account when calculating holiday pay.
Employees of the East of England Ambulance Service NHS Trust brought forward their case based on the fact that they worked both non-guaranteed and voluntary overtime (apart from regular mandatory). Whilst the employer is not legally obliged to offer neither non-guaranteed nor voluntary overtime, non-guaranteed overtime must necessarily be worked if it is offered, whilst staff can opt not to work voluntary overtime when offered to them.
The claimants contended that since voluntary overtime was availed of regularly, it should be considered as part of their “normal remuneration” for the purposes of calculating holiday pay.
Whilst the Employment Tribunal contended that voluntary overtime pay should not be considered to form part of normal remuneration, since volunteering is not contractually required, the Employment Appeal Tribunal held that it should nevertheless be construed as part of normal remuneration when paid over a “sufficient period of time”. The EAT however inserted a caveat stating that such voluntary overtime would have to have been taken and paid out frequently in order to also constitute normal remuneration.
Upon appeal, the previous decision was confirmed, thus making it clear that employers should always take note of employees’ actual remuneration payments. Of course, the subjective element of what degree of consistency warrants regular remuneration remains to be assessed on individual bases.