The calculation of holiday pay is due to be considered yet again by a UK court this Summer, with the Northern Ireland Court of Appeal (NICA) hearing an appeal in the case of Patterson v Castlereagh Borough Council. The case, which is due to be heard on 17 June, raises the following questions:

  • Under the Working Time Directive, must voluntary overtime be taken into account when calculating holiday pay (ie overtime that the employer is not obliged to offer, and which, if offered, the worker is not required to do)?
  • If so, can this principle of EU law be read across (‘purposively’) into NI domestic legislation (which is in substantially the same terms as the legislation applying in Great Britain) so as to give effect to that requirement?

The appeal is against a decision of a Northern Ireland Industrial Tribunal (IT), which ruled that the Working Time Directive does not require voluntary overtime to be taken into account when calculating holiday pay. In reaching that conclusion the IT had regard to the Employment Appeal Tribunal’s decision in Fulton v Bear Scotland Ltd (although the EAT’s decision is not binding on Industrial Tribunals in Northern Ireland). In the Fulton case the EAT ruled that when calculating holiday pay the employer should have taken into account the non-guaranteed overtime that the claimant worked (ie overtime which the employer was not obliged to offer but which the claimant was required to do if asked) (read more). Although the IT agreed with the EAT’s interpretation of the law, it was of the opinion that the EAT’s reasoning only applies to overtime that the worker is obliged to do if asked and not the kind of voluntary overtime in issue in Mr Patterson’s case. 

Whatever the outcome of the appeal, the decision of the NICA will only be binding in Northern Ireland and not the rest of the UK. However, NICA decisions are considered persuasive by British courts and tribunals where there are no existing binding cases on a point. Therefore the NICA’s decision could well influence the outcome of future cases in England and Wales and Scotland. 

To read the Industrial Tribunal’s decision click here