In Dudley Metropolitan Borough Council v Willetts and others the EAT has ruled that payments for voluntary overtime should be included in holiday pay calculations.
The EAT said voluntary overtime should be included where the pattern of work extends for a sufficient period of time on a recurring basis to justify the description “normal”. Failure to include these payments would deter individuals from taking their entitled annual leave - a pillar of EU social law. The EAT did, however, caution that whether overtime payments are sufficiently “regular and settled” to require inclusion is fact sensitive and will need to be determined on a case by case basis.
This decision is the first binding decision on this point in England and Wales and provides clarity on voluntary overtime, as the position had remained somewhat unclear in the aftermath of the holiday pay cases such as Lock and Bear Scotland.