ARTICLE · 01 JULY 2015

Should Voluntary Overtime Be Included When Calculating Holiday Pay?

Reed Smith (Worldwide)

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Another decision has been handed down to clarify – or complicate – the position on which aspects of pay should be included when calculating an employee's entitlement to holiday pay

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Eleanor J. Winslet

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Another decision has been handed down to clarify – or complicate – the position on which aspects of pay should be included when calculating an employee's entitlement to holiday pay.

The Court of Appeal in Northern Ireland ("CA") has held that voluntary overtime is not necessarily excluded from the calculation of holiday pay for the purposes of the Working Time Regulations 1998 (as derived under the EU Working Time Directive).

The case of Patterson v Castlereagh Borough Council held that it was a "question of fact" for each Tribunal to determine whether or not voluntary overtime was "normally" carried out by the employee. If so, it should be considered to be part of the employee's "normal remuneration" and included when calculating holiday pay.

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