In the case of Patterson v Castlereagh Borough Council, the Northern Ireland appeal court deemed that there was absolutely no reason why voluntary overtime should not be included in holiday pay.
In the United Kingdom, there has been an ongoing human resources issue concerning how businesses should calculate holiday pay for their employees. Many of the relevant provisions in the Northern Irish working time regulations reflect the same as those in the United Kingdom. While there have been multiple overtime claims brought against local authorities, Patterson’s was run as the test case on the issue. HR experts explain that voluntary overtime is just that; this is agreed overtime which the employer is not obliged to provide and which the employee can either choose to work or choose to reject.
Patterson worked 52 hours over a period of approximately 13 weeks. This equates to about four hours of overtime per week, or an additional £60 of pay per week. Patterson reported that he only received basic pay during his holiday. The industrial tribunal found that purely voluntary overtime should not be included in the calculation of holiday pay, as it said this had been specifically excluded by the EAT in the Bear Scotland case. This case looked at overtime that workers were required to accept in situations where it was offered to them. At this point, Patterson appealed to the NI Court of Appeal citing that the industrial tribunal made a mistake in the interpretation of the EAT’s comments.
Lawyers acting on both sides ultimately agreed that the tribunal had mistakenly interpreted the Bear Scotland decision. The appeal court agreed with both sides and found there was no reason in principle why voluntary overtime shouldn’t be included in holiday payment.
Patterson v Castlereagh Borough Council truly is a landmark case in the long running debate surrounding the calculation of holiday pay and overtime. Human resource experts urge companies to clearly state their rules when it comes to overtime and overtime payment to avoid any issues in the future.
