On 26 June 2015, the Northern Ireland Court of Appeal (NICA) delivered judgment in the case of Patterson v Castlereagh Borough Council. Although a written judgment is yet to be released, we understand that the court confirmed in an oral judgment that, "there is no reason why voluntary overtime cannot constitute part of a "normal working week". This means that voluntary overtime may, in principle, count towards holiday pay in Northern Ireland. The case has been remitted back to the Industrial Tribunal for determination on its particular facts.
This is the first decision at appellate level in Northern Ireland and Great Britain which directly addresses the issue of voluntary overtime and the calculation of holiday pay. Previously, the Tribunal at first instance had held that purely voluntary overtime should not be included in the calculation of holiday pay. That decision was appealed to the NICA on the basis that the Tribunal had appeared to misdirect itself when it applied the EAT's decision in Bear Scotland to conclude that voluntary overtime (unlike non-guaranteed overtime), should not be included in holiday pay.
At the appeal hearing, the parties had accepted that the Tribunal had "fallen into error" (whether because of a misinterpretation of Bear Scotland or because of the lack of necessary evidence before it). The employer also appeared to concede that, in principle, voluntary overtime could be included in holiday pay provided it was "normal remuneration" (i.e. intrinsically linked to the contractual tasks and exhibiting the necessary degree of permanence).
The decision is only 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 not existing binding cases on a point. Therefore, the NICA's decision could well influence the outcome of future cases in Englandand Wales and Scotland.
Following this decision, it seems likely that the focus in relation to voluntary overtime will fall to be a consideration of the facts of each particular case and whether the manner and regularity in which the voluntary overtime is worked meets the requirements of the "normal remuneration" test.
We will report in more detail when the written judgment becomes available.