It is well established that workers are entitled to their
"normal remuneration" during the four weeks of annual
leave granted under the Working Time Directive. However, what
constitutes "normal remuneration" continues to be a
contested area despite the recent developments in case law on the
The EAT has already addressed the issue of contractual
commission payments and non-guaranteed overtime payments, holding
that these payments should be included where they are intrinsically
linked to the performance of the tasks carried out under the
contract of employment.
However, in the most recent claim, an employment tribunal was
asked to consider whether the calculations of holiday pay for the
56 claimants employed by Dudley Council should include voluntary
overtime, voluntary standby allowances and voluntary call-out
payments. It was held that, although the rotas in question are
voluntary, once an employee has signed up to the relevant rota,
they are required to attend the workplace (or be available, if on
standby). Therefore the payments are inherently connected to the
work required to be done under the contracts. Furthermore,
according to the Tribunal, as a number of the voluntary payments
have previously been made with sufficient consistency and
regularity, they could be properly identified as forming part of
"normal remuneration" and should be included when
calculating the workers' statutory holiday pay.
Whilst this most recent tribunal decision is non-binding, and
each case will turn on its own facts, it demonstrates the direction
that the case law in this area is taking. It applies the
calculation of statutory holiday pay in line with the EAT's
previous decisions; that these calculations should include the
payments a worker normally receives under their contract of
employment, having particular regard to the frequency and
regularity with which the payment is made.
Employers might consider whether to wait for an appellate
decision on this point or take action now. In any event, it would
be advisable for employers to review the payments that they make to
staff and assess their frequency and connection to the work being
performed in order to identify any potential risks going
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