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Do Employers Need to Include Overtime in Holiday Pay Calculations?

on Friday, 02 July 2021.

The Supreme Court appeal hearing for the case of East of England Ambulance Trust v Flowers regarding voluntary overtime and holiday pay entitlement is no longer going ahead and it appears that the case may have been settled.

The Case

As previously reported, this case concerned the question of whether genuinely voluntary overtime should be taken into account when calculating holiday pay. 

In August 2018 the Employment Appeal Tribunal (EAT) confirmed that voluntary overtime paid over a sufficient period of time on a regular basis should be taken into account when calculating holiday pay. Following that the Court of Justice of the European Union (CJEU) made some comments which cast doubt on this position. 

The Flowers case went through the appeal courts in an effort to resolve whether the CJEU's comments should affect the position in the UK as set out by the EAT. The Court of Appeal sided with the EAT on the basis that the CJEU's comments were not clear or a central part of the case it was deciding. 

The Supreme Court was due to determine the issue beyond doubt. It is that hearing which has now been cancelled.   

What Is the Current Position?

Genuinely voluntary overtime should be included in the calculation of holiday pay if it has been paid over a sufficient period time and on a regular and recurring basis to become part of the worker's 'normal remuneration'.  

What Does This Mean for Employers?

If voluntary overtime has been worked regularly over a period of time there is a risk it will need to be included in holiday pay calculations. Some cases will be clear but many will not.  What has been left unresolved is how long overtime needs to have been worked and how regularly. This is likely to generate many more cases for the tribunals with each having to be looked at on its own facts. 


Our employment lawyers at VWV can assess on a case by case basis whether overtime will be required to be included in holiday pay calculations. If you are dealing with any holiday pay claims or issues regarding holiday pay, please contact Michael Halsey in our Employment Law team on 020 7665 0842, or complete the form below.

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