Latest instalment in the ongoing saga of The Chronicles of Holiday Pay

26 May, 2016
by: Cripps Pemberton Greenish

BeachAs the summer holiday season is fast approaching what better time for the Employment Tribunal to hand down another judgment on holiday pay.

In the case of White & Others v Dudley Metropolitan Borough Council, the Employment Tribunal held that voluntary overtime, voluntary standby and voluntary call-out payments should be considered ‘normal pay’ when undertaken with ‘sufficient regularity’, which means they should be included in the calculation of a worker’s holiday pay.

The claimants in this case were tradesmen who were invited to work on a Saturday on a purely voluntary basis while working on the council’s stock of social housing. They also elected to go on standby every four weeks, to deal with emergency call-outs and repairs.

In terms of payment, the claimants received a lump sum for their standby week and payment of time and a half for any Saturday overtime in addition to their basic pay. Their holiday pay, however, was based purely on their basic pay. The Council argued that the voluntary overtime payments could be excluded from holiday pay calculations because overtime payments only needed to be included in holiday pay if there was a contractual obligation to perform them.

The Tribunal disagreed with the Council and decided that where voluntary overtime has been carried out regularly for a number of years, payment for it would become part of normal, expected pay and therefore the payment for that work had to be included in the calculation of holiday pay.

A future remedy hearing will determine what ‘regular’ means. The barrister who represented the claimants has indicated his view that one day per quarter should be sufficient to be classified as ‘regular’ but once every six months might be pushing it a bit.

Although other tribunals are not required to follow this decision, it does add weight to the growing trend of expanding the types of payments that need to be included in holiday pay.

Keep an eye out for the next instalment in the ongoing saga.