Dudley Metropolitan Borough Council v Willetts
As well as working normal hours, Dudley Council’s quick response team, comprised of electricians and plumbers, etc., were called out to work in emergencies. The emergency call outs were classed as “voluntary overtime”, for which the workers were entitled to additional standby and call-out payments. When they were working the voluntary overtime, the workers were carrying out the same tasks as specified under their contracts, and they did so for a sufficient period of time on a regular or recurring basis.
The EAT confirmed that to exclude such payments from holiday pay would result in a financial disadvantage to the workers. This might deter them from taking an annual leave, which is contrary to the purpose of the whole holiday regime. Holiday pay must correspond to “normal pay”. Employers must consider what the worker would have earned if they had not taken leave.
This decision follows the trajectory of the previous holiday pay cases and provides definitive guidance that voluntary overtime that is worked on a regular basis must be included in calculating holiday pay.
It is unlikely that this will expose many businesses to backdated claims for voluntary overtime because employees who have a break of more than three months between payments will be precluded from claiming unlawful deductions from wages. Ensure your payroll is up to speed!