Peterborough office

48 Broadway, Peterborough Cambridgeshire, PE1 1YW

01733 346 333 01733 562 338 enquiries@hegarty.co.uk

Stamford office

10 Ironmonger Street, Stamford Lincolnshire, PE9 1PL

01780 752 066 01780 762 774 enquiries@hegarty.co.uk

Oakham office

66 South Street, Oakham Rutland, LE15 6BQ

01572 757 565 01572 720 555 enquiries@hegarty.co.uk

Market Deeping office

27a Market Place, Market Deeping, PE6 8EA

01778 230 120 01778 230 129 enquiries@hegarty.co.uk
  • Services
  • Sectors
  • Our Team
  • About us
  • Insights & Legal
  • Legal Q&As
  • Useful information
  • Contact us
  • Careers
  • 3 Aug 2017

    Holiday Pay Calculations - The Next Step

    In the case of Dudley Metropolitan Borough Council – v – Willetts & Others the EAT has confirmed that regular voluntary overtime should be included in the holiday pay calculation. This follows a series of reasonably high profile cases which have clarified how holiday pay should be calculated.  

    For the statutory minimum holiday entitlement employees should whilst on holiday receive “normal pay” and the earlier cases have clarified, for example, that compulsory overtime payments and other allowances should be taken into account in the calculation. In this case it was voluntary whether the employees put themselves forward for the overtime rota and the Employment Tribunal accepted that staff could “drop on and off the rotas to suit themselves, whether day by day, week by week, month by month or permanently” but if the employee remained on the rota (which there was no obligation to do) they were then obliged to carry out the overtime work. For this they received not only additional overtime pay but also call out payments, mileage and standby allowances. 

    All cases are decided on the particular facts but in this case the Employment Tribunal which initially dealt with the case considered that the payment made for the workers’ voluntary overtime were “sufficiently regular to constitute normal pay”.  Following the Employment Tribunal’s decision the employer appealed to the EAT who on considering the case dismissed the appeal and held that where the pattern of work extends for a sufficient period of time on a recurring basis, to justify the description “normal”, voluntary overtime payments must be included in holiday pay calculations.

    It should be remembered that this ruling only applies to the statutory minimum holiday and not to any additional contractual period of holiday where the employer could still argue that holiday pay will be calculated at the flat weekly wage. 

    It has been clear from a number of non-binding Employment Tribunal decisions that this is the way the position was being interpreted but this is the first Appellant decision which is now binding on Employment Tribunals. 

    Many progressive employers have already calculated holiday pay on the basis of what actually is the “normal pay” but there will be many employers who will need to change their policies as a result of this decision. 

    Contact our team today

    Contact Permission

    We would like to stay in touch with offers, news and event invitations. We will always treat your personal details with respect and we will never sell them to other companies for marketing purposes. You can find details of our full privacy policy here.

    You can stop receiving updates at any time by clicking 'unsubscribe' at the bottom of our emails or by emailing enquiries@hegarty.co.uk

    Please let us know if you would like to hear from us:

    Stay up-to-date with Hegarty