We previously commented on the Court of Appeal’s (CoA) decision in Flowers v. East of England Ambulance Service (NHS Trust). It was held that: (a) regular voluntary overtime should be included in Working Time Directive holiday pay and that it is for tribunals to determine if a pattern of voluntary overtime is sufficiently regular and settled to be included in holiday pay calculations; and (b) the NHS Terms and Conditions of Service Handbook created a contractual entitlement to have overtime taken into account for the purposes of calculating holiday pay.

The Supreme Court subsequently granted the NHS Trust permission to appeal against the CoA’s ruling and this was due to be heard on 22 June 2021. A Supreme Court decision may have had wider implications for NHS employees and all other employers who have not as standard practice included voluntary overtime in holiday pay calculations.

At the final hour, the Supreme Court removed the listing of this appeal – it is understood that parties may have agreed to an out of court settlement. This is most likely in response to a new NHS collective framework agreement with the NHS Staff Council, obliging NHS employers to include regularly worked overtime and additional standard hours in any holiday pay calculations.

As the CoA’s ruling in Flowers stands, it is still best practice for employers to ensure that employees’ Working Time Directive holiday pay includes regularly worked voluntary overtime. The case law which has evolved over the years in this space is notoriously complicated. If your organisation would like assistance with any holiday pay complexity, we have a dedicated team of employment lawyers on hand who can help navigate the nuances associated with holiday pay rules.