01.07.15 Voluntary Overtime in the Holiday Pay Calculation

The Court of Appeal in Northern Ireland held that employers should include voluntary overtime when calculating employee’s holiday pay, in the case of Patterson v Castlereagh Borough Council.

Mr Patterson worked under a Contract of Employment under which voluntary overtime was optional – the employer had no obligation to offer overtime and Mr Patterson was not obliged to work it.

Initially this case was heard at Industrial Tribunal, which held that voluntary overtime should not be included in holiday pay calculations however, the decision was appealed to the Northern Ireland Court of Appeal (due to there being no Employment Appeal Tribunal in Northern Ireland).

The Northern Ireland Court of Appeal held that the Industrial Tribunal’s determination was “erroneous.” However the Court of Appeal did not provide guidelines for employers in order to determine how holiday pay should be calculated. Instead, they stressed it was up to each Tribunal to determine, based on the particular circumstances of each individual case.

This judgement may bring more voluntary overtime claims to the Courts, but unfortunately employers have no clarification as to when it should and should not apply.

Decisions from the Northern Ireland Court of Appeal are not legally binding on England and Wales’ Tribunals and Court, however employers should be aware of the potential ramifications from this recent decision.

See our previous news item regarding this case here.