In Brettle v Dudley Metropolitan Borough Council, the Birmingham Employment Tribunal found that voluntary overtime payments should be included in calculating holiday pay, provided the voluntary overtime was worked regularly enough to constitute "normal pay". The Tribunal considered that one in every four or five weeks was sufficiently regular.
The Tribunal found that such payments should be excluded from holiday pay if voluntary overtime was only worked "very rarely". However, it is unclear where employers should draw the dividing line in determining whether voluntary overtime has been worked regularly enough to be included in calculating holiday pay. Whether or not voluntary overtime pay forms part of "normal pay" for holiday pay calculation purposes will need to be determined on the facts of each case. However, such payments only need to be included in calculating pay for the first 4 weeks of EU derived holiday entitlement (Regulation 13 leave) and not in respect of the additional 1.6 weeks UK law provides (Regulation 13A leave).
As this is only a Tribunal decision, it is not legally binding. It comes after the Northern Irish Court of Appeal also expressed the view in Patterson v Castlereagh that there is no reason in principle why voluntary overtime pay should not be included in statutory holiday pay.
