Back on the 31st July 2017, the Employment Appeal Tribunal (EAT) ruled in the case of Dudley Metropolitan Borough Council v Willetts and others (2017), that voluntary overtime must be included in holiday pay.
Dudley Metropolitan Borough Council v Willetts And Others (2017)
The case of Dudley Metropolitan Borough Council v Willetts and others (2017) involved a group of 56 employees who were employed by Dudley Metropolitan Borough Council to maintain and repair its Council Houses. In addition to working their contracted hours of 37 hours a week, these employees worked additional hours as voluntary overtime as they were on an on call register once every 4 – 5 weeks. However, this additional voluntary overtime was not factored in by the Council when calculating the employees holiday pay. As a result, the employees argued that the Council’s policy breached the Working Time Regulations 1998.
EAT Rules That Voluntary Overtime Must Be Included In Holiday Pay
The Employment Tribunal ruled in favour of the employees at first instance. However, the Council appealed to the EAT.
The EAT upheld the original decision at first instance and ruled in favour of the employees. The EAT held that employees are entitled to be paid their ‘normal remuneration’ whilst on holiday, and that where voluntary overtime is “sufficiently regular and settled” (i.e. forms a pattern of work that has been conducted over a sufficient period of time on a regular and/or recurring basis), then it should form part of the employees normal remuneration for the purposes of calculating holiday pay. To hold otherwise, the EAT ruled, would leave employees worse off whilst on holiday compared with when they were at work, and would therefore act as a deterrence to going on holiday.
The Implications Of The Dudley Case
The ruling only applies to the 4 weeks holiday time that employees are entitled to under the Working Time Directive, and not to the extra 1.6 weeks holiday time that they are entitled to under UK law.