Voluntary overtime and holiday pay

Case law has previously held that when calculating holiday pay employers should take into account commission and non-guaranteed overtime payments where such payments form part of an employees ‘normal’ pay. 

The latest question to be considered in a recent Northern Ireland case was whether voluntary overtime payments must also be included in holiday pay, i.e. where there is no obligation on the parties to offer or accept overtime. At first instance this was held not to be the case, which would have been welcome news for employers. However, on appeal it was decided that voluntary overtime should be included in holiday pay calculations.

In light of previous case law this might not be an entirely surprising decision. It is worth noting that this judgment from Northern Ireland is not binding in England and Wales. Nonetheless, it will no doubt be considered persuasive authority in our courts and tribunals and it is unlikely we have heard the last of these types of cases as the holiday pay saga continues. 

Please contact a member of the Employment Team if you would like to discuss further.