Employment tribunal cases across the UK are challenging the traditional notion that voluntary overtime should be included in holiday pay calculations.
The news comes after a landmark Employment Tribunal in 2014, commonly referred to as Bear Scotland v Fulton, concluded that non-guaranteed overtime should be included in holiday pay.
Under English law, non-guaranteed overtime is defined as work that the employer does not have to provide but which employees are obliged to work if required to do so.
In contrast, voluntary overtime is typically considered work which an employee is free to refuse, but an employer is under no obligation to offer.
Since the Bear Scotland vs Fulton case, a series of Tribunal cases have challenged whether voluntary overtime should be considered in holiday pay calculations.
In two recent cases (Whitehead v EMH Housing Regeneration, White v Dudley Metropolitan Borough Council), Employment Judges have shared the view that the real issue in the matter is whether call-out allowances and stand-by payments form part of a worker’s typical remuneration.
A common point of contention, stressed by an Employment Judge in the Whitehead v EMH Housing Regeneration case, is that there is a clear financial disincentive for employees in taking annual leave if their employers calculate holiday pay on basic pay alone.
A landmark case in February 2016, which ruled in favour of a British Gas salesman who received only his small basic salary whilst on holiday, despite earning most of his income through sales commission, has already opened new doors to employees wishing to contest their holiday pay before a Tribunal.