Voluntary Overtime and Calculating Pay for Annual Leave
Date: 12th July 2018 | Categories: Employment law
The recent case of Flowers v East of England Ambulance Trust has highlighted that voluntary overtime, if completed and paid over a sufficient period, should be taken into account when calculating pay for annual leave.
What Constitutes Normal Pay?
The key question is whether the voluntary overtime pay should be considered ‘normal pay’ for the purposes of calculating holiday pay and annual leave. This is a matter to be decided on the facts by an employment tribunal. If, however, an individual is choosing to complete regular voluntary overtime for which they are paid, then it should be taken into account when considering how much that individual is paid when calculating the pay. If, on the other hand, voluntary overtime is not a regular / frequent occurrence, but perhaps once every few months, then it would not be likely to be deemed to be part of their ‘normal pay’.
Guidance for Employers | Annual Leave Calculations
- Whilst on face value, there can be ambiguity about what is ‘normal’ overtime, and whether payments should be taken into account.
- A common sense approach of considering the employees pay slips and pay periods should be taken.
- If voluntary overtime is frequently or always recorded on the pay slip, then it would be likely to be deemed to be normal pay, and thus should be taken into account when calculating annual leave.
The fact that there is no hard and fast rule allows flexibility for how companies operate and it is up to businesses to consider overtime and see whether voluntary overtime is normal for their employee, in which case the remuneration which follows from this should be taken into account when calculating holiday pay.
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