Towards the end of last year we commented on the Employment Appeal Tribunal’s decision in the case of Dudley MBC v Willetts. The EAT found that pay received in relation to entirely voluntary overtime could form part of a worker’s ‘normal remuneration’. This meant that it was possible that it should be factored in when calculating an employee’s holiday pay. However, in the more recent case of Flowers v East of England Ambulance Trust, an NHS Trust has sought to convince the EAT that the Dudley case was wrongly decided.
Mr Flowers and his colleagues worked for the East of England Ambulance Trust on their standard terms and conditions of employment. These terms provided for two forms of overtime. The first constituted what is often called ‘non-guaranteed overtime’. It covered situations in which ambulance personnel were dealing with a ‘call out’ that ran beyond the end of their normal shift. In such cases, they were obliged to keep working until the job was done. The second form of overtime was genuinely voluntary, with the employees enjoying the right to accept or reject the overtime as they saw fit.
Mr Flowers and his colleagues brought Employment Tribunal claims against the Trust, arguing that pay received in respect of both forms of overtime ought to be factored in when calculating their holiday pay. The Trust conceded the point in relation to the ‘non-guaranteed overtime’, but argued that voluntary overtime pay should not be included. The case went to the Employment Appeal Tribunal where, despite the fact that the Dudley case had gone in favour of the workers in very similar circumstances, the trust argued that the Dudley case had been wrongly decided.
Having listened to arguments from both sides, the EAT came down firmly in favour of Mr Flowers and his colleagues. In simple terms, Mr Justice Soole concluded that voluntary overtime of this nature could be part of ‘normal remuneration’ if it was paid over a ‘sufficient period of time’ and on a sufficiently regular basis. The Employment Tribunal needed to consider the facts of the case and make its decision having regard to these factors.
If you have already taken account of the earlier Dudley decision, this case probably won’t make much difference to your current practices and procedures. If, however, you pay voluntary overtime pay and the Dudley case passed you by, then now might be the time to review your position.
If you want to discuss your holiday pay arrangements with us, please get in touch.