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A case in the Northern Ireland Court of Appeal follows on the theme of including non-guaranteed overtime and commission payments in holiday pay calculations. The case of Patterson v Castlereagh Borough Council considered whether voluntary overtime should be included by employers when calculating holiday pay. The Court of Appeal, while adopting a cautious approach, nonetheless concluded that it should. The Industrial Tribunal had concluded that voluntary overtime, which the employer was not obliged to offer and the employee not obliged to accept, should not be included in holiday pay calculations. However this was appealed to the Northern Ireland Court of Appeal (there is no equivalent of the EAT in Northern Ireland).
Unfortunately for employers, the Northern Ireland Court of Appeal held that the Tribunal’s decision regarding voluntary overtime was not correct. They declined to provide any guidelines with regard to the tests which an employer should apply in determining the pay which constituted calculation of holiday pay, merely stating that it was a question of fact for each Tribunal to determine in respect of the particular circumstances of each individual situation.
So the door is being pushed ever wider to include voluntary overtime – but unfortunately there is still insufficient clarity on this.
Decisions in the Northern Ireland Court of Appeal are not legally binding on Courts and Tribunals in England and Wales but there may well be ramifications from this decision as a persuasive authority, as the saga of holiday pay continues…
This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.
For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.
Royds Import Case Law Update
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