After the Bear Scotland v Fulton
case decided that regular non-guaranteed overtime should be included in holiday pay
, it was inevitable that the position with voluntary overtime would be tested.
The Northern Irish Court of Appeal was recently asked the question but their answer has not really brought us any further towards clarity. Whilst Northern Irish cases are not binding on Courts in Great Britain meaning that there is no requirement for British Courts to decide in the same way, it is the first time that voluntary overtime has been addressed since Bear Scotland so the Court’s view is interesting nonetheless.
In Patterson v Castlereagh Borough Council
, the NI Court of Appeal decided there is “nothing in principle” to stop voluntary overtime being included in holiday pay. However, this is not the same
as saying that voluntary overtime must be included in holiday pay.
In this case, the NI Industrial Tribunal decided voluntary overtime should not be included because it took influence from the Bear Scotland case which said that voluntary overtime should not be included. However, this was an erroneous decision because Bear Scotland did not
decide that voluntary overtime should not be included, only that regular non-guaranteed overtime should be. It was silent on voluntary overtime. The NI Court of Appeal pointed out the tribunal’s error, and has sent the case back for a fresh hearing, noting that there was nothing in principle to exclude voluntary overtime in holiday pay. It is now down to a new Industrial Tribunal to look at the facts again.
Non-guaranteed overtime is overtime which the employer is not contractually obliged to give, but when it is given, the employee is contractually obliged to do it. Voluntary overtime is different because there is no contractual obligation on either party to either offer or perform it.
Technically, for now, our clients in England, Scotland and Wales need not be concerned by the developments in Northern Ireland because a claim would need to be brought here before anything may affect them. Clients with operations in Northern Ireland should await the outcome of the fresh tribunal’s decision and then assess the risk within their organisation.
Our Payroll Advice team can give you further guidance on how to deal with overtime and holiday pay.
If you need any clarification on this issue then contact the Peninsula Advice Service on 0844 892 2772.