On 7th November, we brought you a review of the 'holiday pay/overtime' cases of Bear Scotland v Fulton and Baxter, Hertel (UK) Ltd v Wood and others [2014] UKEATS/0047/13/BI:
http://bit.ly/1uAlo05

Our review is available for subscribers in the vault (#1489). A Northern Ireland tribunal has now issued its 44-page decision in a case relating to non-guaranteed and voluntary overtime, held back in until the Fulton case was published. At the time of our Fulton review we stated that, "It is the case that a UKEAT decision is not binding in Northern Ireland. However, the legislative rights on this issue are the same and the logic will apply." How right we were. Here is John Taggart BL's review of the NI case:

Robert Patterson v Castlereagh Borough Council [2014] NIIT 1793/13

Keywords: Overtime/holiday pay; unlawful deductions from wages

The claim was for unauthorised deductions from wages contrary to Article 45 of the Employment Rights (NI) Order 1996 and/or breach of the Working Time Regulations (NI) 1998. The claimant carried out regular occasional/relief work for the respondent and later commenced full-time employment as an Assistant Plant Engineer, but continued to carry out regular relief work also. He complained, inter alia, that he no longer received any payment for annual leave, calculated on the basis of such occasional/relief work.

Central to the issue in the proceedings was whether any period of annual leave which the claimant was entitled to should be calculated pursuant to Article 17 or Article 20 of the Employment Rights (NI) Order and whether the claimant had ‘normal working hours’.

The tribunal emphasised the importance of the recent UKEAT authority of Fulton & others v Bear Scotland which clarified that ‘voluntary overtime’ which the claimant was not contractually obliged to do could not be included in the calculation of holiday pay, for the purposes of the WTR. In contrast, ‘compulsory overtime’ and ‘non-guaranteed overtime’ must be included in holiday pay calculation.

The decision of the EAT in Bear received much media coverage, but it is vital that attention is paid to the 3 separate definitions of overtime clarified by the EAT and accepted by the tribunal in this case:

(1) ‘Non-guaranteed overtime’: where there is no obligation on the employer to provide the overtime but where the employee is obliged to work, if offered overtime.
(2) ‘Voluntary overtime’: additional work which the employer asks an employee to do but which the employee is free to refuse.
(3) ‘Compulsory overtime’: where the employer is contractually obliged to provide the overtime hours and the worker is contractually obliged to complete.

The outcome in this particular case was essentially that the Tribunal found that unlawful deductions had been made in relation to the failure to pay for holidays in relation to casual work under the casual work contract (i.e. the non-guaranteed overtime) but that the respondent had correctly paid the claimant in relation to any overtime work carried out by him under his contract of employment as an assistant plant engineer (i.e. the voluntary overtime).

Practical lessons

Amidst the media coverage of the landmark EAT decision, it has perhaps not been appreciated that ‘voluntary overtime’ is still not considered part of ‘normal remuneration’ and is not required to be reflected as an average taken over an appropriate reference period. Despite this technicality, it appears a real possibility that ‘voluntary overtime’ could be included in calculating holiday pay in the future, due to the developing European case law.

You will find the full case decision on the OITFET website:
http://www.employmenttribunalsni.co.uk/