Pay for voluntary overtime

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For the purposes of calculating holiday pay should pay for voluntary overtime that is ‘normally worked’ be considered ‘normal remuneration’?

In Dudley Metropolitan Borough Council v Willetts the EAT held that yes, it should be considered ‘normal remuneration’.

In this particular case the Respondents were Quick Response Operatives that worked for the Council. They performed roles such as plumbers and roofers who worked day jobs but also worked overtime that was entirely voluntary which paid additional standby and callout allowances.

Dudley Council found that overtime payments were not considered ‘normal remuneration’ as they were not intrinsically linked to the tasks listed under the employment contract. Dudley council relied on the case of Williams and Lock when coming to this decision.

This decision was rejected by the EAT as excluding such payments from holiday pay would result in a financial disadvantage for the employee and therefore might deter them from taking annual leave which is an important part of EU Social Law. The EAT also found that there was a link between the payments and the performance of their duties as when working overtime, the workers were actually performing the same tasks as were listed under their contracts.

Normal remuneration is considered to be that which is normally received and holiday pay must correspond to this. Normal would be that which is paid over a significant period of time and should correspond to what the worker would have earned should they had not taken leave.