How voluntary overtime affects holiday pay

  • Working Time
Peninsula Logo

Peninsula Group, HR and Health & Safety Experts

(Last updated )

Read our article: 'How voluntary overtime affects holiday pay'. Contact us today for more information about our Employment Law, Health & Safety, and HR services.

A recent case law judgment brought attention to the subject of overtime and holiday pay calculations once again; this time on the concept of voluntary overtime which was previously untested in the British courts. In the case of White & Others v Dudley Metropolitan Borough Council the tribunal held that voluntary overtime, voluntary standby and voluntary call-outs should be regarded as “normal” working hours when they are taken with “sufficient regularity”. Voluntary overtime is defined as overtime which the employee is free to accept or decline at their own will without any consequences. Deeming voluntary overtime to be part of normal working hours for the purposes of holiday pay means the sum of holiday pay may need to be recalculated and increased. Within the Judgment, the Employment Tribunal said that voluntary overtime hours should only be included in the holiday pay calculation for the first 20 days of an employee’s annual leave entitlement – those granted under European law. There is no requirement to do the same for the rest of the entitlement granted by the UK Working Time Regulations. Currently, there is no clarification of what is meant by “sufficient regularity” as this is the first time a case on this subject has been heard. There is sufficient argument for employers to do nothing for now, regardless of this judgment. This is because this judgment is from the Employment Tribunal and therefore is not binding on any other case which may be heard in the future. If the decision is appealed, it may be overturned or upheld and at that point employers should consider reviewing their holiday pay practices. In addition to voluntary overtime there are two other types of overtime –‘compulsory’ and ‘non-guaranteed’. With compulsory overtime, the employer is contractually obliged to offer the additional work and the employee is obliged to accept it. With non-guaranteed, the employer is not contractually obliged to offer it but if they do, the employee is contractually required to work it. Previous case judgments have already set the precedent that compulsory and “normal” non-guaranteed overtime should also be taken into account when calculating holiday pay as they make up the normal hours which an employee works. Calculating holiday pay can be tricky in light of the above judgments. Peninsula’s trained payroll experts are available between 9am – 5.30pm Monday to Friday. Call us on 0844 892 2772 (option 3)  for friendly and helpful advice and solutions to common payroll issues.


Got a question? Check whether we’ve already answered it for you…

Related articles

  • A woman confidently poses - caption above her says 'Ask Kate'


    Ask Kate: my employee’s unmotivated after their holiday. Help!

    This caller was worried about their employee struggling with the post-holiday blues. So, they asked Kate Palmer, Peninsula’s HR Advice and Consultancy Director, for expert advice...

    Kate PalmerHR Advice and Consultancy Director
    • Performance & Appraisals
  • man and woman shaking hands


    The employer’s guide to onboarding a graduate

    One in four graduate employees quit in their first two months on the job, according to the Telegraph. To help improve the likelihood of your graduates succeeding and progressing in your company, here are some important tips…

    Kate PalmerHR Advice and Consultancy Director
    • Recruitment
  • ill person lying on sofa blowing nose


    The five-step process for managing staff sickness

    ACAS recently updated its guidance around managing sickness absences at work. So, now is a good time to make sure you’re doing everything you can to help manage sickness in your workplace.

    Gavin Scarr HallDirector of Health and Safety
    • Leave and Absence
Back to resource hub

Try Brainbox for free today

When AI meets 40 years of Peninsula expertise... you get instant, expert answers to your HR and health & safety questions

Sign up to our newsletter

Get the latest news & tips that matter most to your business in our monthly newsletter.

International sites

© 2023 Peninsula Business Services Limited. Registered Office: The Peninsula, Victoria Place, Manchester, M4 4FB. Registered in England and Wales No: 1702759. Peninsula Business Services Limited is authorised and regulated by the Financial Conduct Authority for the sale of non-investment insurance contracts.

ISO 27001 and 9001 accredited company.
The Sunday Times - Top Track 250.
Glassdoor 2018 Best Places To Work.