Should employers include voluntary overtime when calculating an employee’s holiday pay?
In a recent Court of Appeal case in Northern Ireland (Patterson v Castlereagh Borough Council), the Court held yes!
The Tribunal that first heard the case held that overtime which the employer was not obliged to provide and the employee is not obliged to perform should not be included in holiday pay calculations, however on appeal the Court disagreed.
The Northern Ireland Court of Appeal held that the industrial tribunal’s determination in respect of voluntary overtime was erroneous but unhelpfully they did not provide any further guidelines. They stressed that this was a ‘question of fact’ for each tribunal to determine, based on the particular circumstances of each individual case.
This judgment opens the door to the inclusion of voluntary overtime, but employers still will not have sufficient clarity on its application.
Decisions from the Northern Ireland Court of Appeal are not legally binding on the courts and tribunals in England and Wales, however it is “persuasive” and employers should be aware of the potential ramifications of this most recent decision.
This will not be the last of the case law in this area – watch this space for further updates and/or follow us on twitter @peachlawuk