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Voluntary Overtime and Holiday Pay

Various members of the East of England Ambulance Trust worked irregular ‘non-guaranteed’ and ‘voluntary’ overtime. They argued that their voluntary overtime should count towards their ‘normal’ remuneration for the purposes of calculating holiday pay.

Should their voluntary overtime be taken into account when calculating their holiday pay?

Flowers & others v East of England Ambulance Trust

The Claimants are all employed by the Trust in a range of roles concerned with the

provision of ambulance services. They brought claims arguing that the calculation of their holiday pay should take account of overtime falling within two categories, known as non-guaranteed overtime and voluntary overtime.

The Trust categorised non-guaranteed overtime as a situation at the end of a shift, where an employee is in the middle of carrying out a task which they must see through to the end. The Trust also called this type of overtime shift overrun payments. It kicked in when, for example, employees were caring for a patient to whom an ambulance had been despatched.

The Trust also offered purely voluntary overtime. None of the employees were expected to volunteer and were always completely free to choose whether to work voluntary overtime. The Tribunal examined the timesheets for the employees and determined that there was no real pattern to the voluntary overtime worked.

The Tribunal held that the Claimants’ contractual terms and conditions entitled them to

have their non-guaranteed overtime taken into account in the calculation of their holiday pay, but not their voluntary overtime. The Tribunal accepted the Trust’s argument that voluntary overtime was in a different category and did not form part of their ‘normal’ pay. .

The Claimants appealed.

Decision 

The EAT held that the non-guaranteed overtime formed part of the Claimants’ “pay” and thus must be taken into account in the calculation of their holiday pay. This was because shift overrun work was a contractual obligation.

In contrast, the EAT set out that voluntary overtime should be taken into account only when it is worked in a regular and settled pattern over “a sufficient period of time”.

The EAT sent the claim back to the Employment Tribunal to assess in each case whether the voluntary overtime had been worked with sufficient regularity. 

Comment 

Cases involving different types of overtime and whether they should be included in holiday pay calculations will inevitably continue to be frequent. Whilst a lot of the principles are now settled, including that non-guaranteed overtime will be included, it’s unlikely that voluntary overtime will be definitively settled.

Case law in relation to voluntary overtime has evolved in a way which means claims have to be decided on a case by case basis, analysing the periods of voluntary overtime worked and the tribunal determining whether it forms a regular and settled pattern. Only then will a tribunal order that it forms part of normal pay and should be included in calculating holiday pay.

Employers should analyse how they manage voluntary overtime and whether they include it in holiday pay.  If an employee is doing e.g. 5 hours of voluntary overtime every week without fail, they would be able to show a regular and settled pattern and holiday pay calculation should reflect their pay.

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