Voluntary overtime and holiday pay – the latest
Those hoping that the Northern Ireland Court of Appeal might reverse the recent tide of decisions regarding the inclusion of variable pay (specifically overtime) in the calculation of holiday pay will
Those hoping that the Northern Ireland Court of Appeal might reverse the recent tide of decisions regarding the inclusion of variable pay (specifically overtime) in the calculation of holiday pay will be sorely disappointed today. It is understood that the employer's legal representatives in Patterson v. Castlereagh Borough Council ("Patterson") conceded at the appeal hearing yesterday that there was "nothing in principle" to prevent voluntary overtime from counting towards holiday pay in appropriate circumstances.
On the basis of this concession, it is understood that the appeal has been allowed and the case has been remitted to an Industrial Tribunal to be reheard.
Patterson had been decided after the Employment Appeal Tribunal (EAT) decision in Bear Scotland v Fulton ("Bear Scotland"), and it had given some employers (false) hope that a distinction could still be made between "voluntary overtime" (overtime which an employee is not obliged to perform) and other types of overtime.
Readers may recall that the Bear Scotland decision focused on "non-guaranteed" overtime (overtime which is not guaranteed, but which an employee is obliged to perform if requested) and the EAT in that case did not make any specific findings on "voluntary overtime".
The Northern Ireland Industrial Tribunal had found in Patterson that Bear Scotland was authority for the principle that voluntary overtime was excluded, on the basis that if overtime was genuinely "voluntary", an employee could not be required to perform it. But this distinction was (unsurprisingly) strongly criticised by the Northern Ireland Court of Appeal, not least because it ignored the overwhelming tide of recent European decisions that make it clear that "normal pay" is the pay that an employee would normally expect when at work, and so if voluntary overtime is worked sufficiently to be normal pay then it should be taken into account.
This concession does not, however, prevent the employer's legal representatives from arguing in the Industrial Tribunal that voluntary overtime should not be included on the facts in Patterson – for example, because the payment was one-off or ad hoc, and therefore should not be treated as "normal pay". But it now seems clear that an employer will be given short shrift from the Courts if it seeks to take a general stand that voluntary overtime, per se, should not be included. If an employer wishes to contest a claim that voluntary overtime should be included, it will need to provide detailed evidence of its precise overtime arrangements to say why not.
On the basis of this concession, it is understood that the appeal has been allowed and the case has been remitted to an Industrial Tribunal to be reheard.
Patterson had been decided after the Employment Appeal Tribunal (EAT) decision in Bear Scotland v Fulton ("Bear Scotland"), and it had given some employers (false) hope that a distinction could still be made between "voluntary overtime" (overtime which an employee is not obliged to perform) and other types of overtime.
Readers may recall that the Bear Scotland decision focused on "non-guaranteed" overtime (overtime which is not guaranteed, but which an employee is obliged to perform if requested) and the EAT in that case did not make any specific findings on "voluntary overtime".
The Northern Ireland Industrial Tribunal had found in Patterson that Bear Scotland was authority for the principle that voluntary overtime was excluded, on the basis that if overtime was genuinely "voluntary", an employee could not be required to perform it. But this distinction was (unsurprisingly) strongly criticised by the Northern Ireland Court of Appeal, not least because it ignored the overwhelming tide of recent European decisions that make it clear that "normal pay" is the pay that an employee would normally expect when at work, and so if voluntary overtime is worked sufficiently to be normal pay then it should be taken into account.
This concession does not, however, prevent the employer's legal representatives from arguing in the Industrial Tribunal that voluntary overtime should not be included on the facts in Patterson – for example, because the payment was one-off or ad hoc, and therefore should not be treated as "normal pay". But it now seems clear that an employer will be given short shrift from the Courts if it seeks to take a general stand that voluntary overtime, per se, should not be included. If an employer wishes to contest a claim that voluntary overtime should be included, it will need to provide detailed evidence of its precise overtime arrangements to say why not.