- Bookmark
- Share
- CaseIQ
Mr N Flowers and others v East of England Ambulance Trust: (England and Wales : Renumeration : Time Off)
Factual and Procedural Background
The Claimants brought claims against the Respondent relating to alleged unlawful deductions from wages, specifically concerning holiday pay calculations. The claims involved both contractual entitlements under the NHS Terms and Conditions of Service ("Agenda for Change") and statutory entitlements under the Working Time Regulations 1998 (WTR) and the Working Time Directive (WTD). The main dispute was whether payments for non-guaranteed overtime ("shift overruns") and voluntary overtime should be included in holiday pay calculations.
The tribunal held preliminary hearings to manage the case, agreeing on a reduced hearing time of four days focused on liability only, with remedy to be considered later. Several Claimants were involved, including one whose claim was initially sought to be stayed but was ordered to proceed with the others. The Respondent did not object to amendments related to deductions for holiday periods for some Claimants.
The hearing involved evidence from one Claimant and multiple Respondent witnesses, with agreed facts and issues outlined by the parties. The tribunal considered the contractual terms, statutory provisions, relevant case law, and factual evidence regarding the nature and regularity of overtime worked.
Legal Issues Presented
- Whether the Claimants’ contractual terms include non-guaranteed and/or voluntary overtime payments in the calculation of contractual holiday pay, particularly the effect of Section 13.9 of the NHS Terms and Conditions of Service Handbook.
- Whether there have been unlawful deductions from wages in respect of contractual holiday pay.
- Whether Article 7 of the Working Time Directive and Regulations 13, 16, and 30(1)(b) of the Working Time Regulations 1998 have been breached regarding the calculation of statutory holiday pay.
- Whether non-guaranteed overtime and voluntary overtime should be included in the calculation of statutory holiday pay under the WTR/WTD.
- Whether the Claimants receive overtime payments with sufficient frequency to constitute 'normal remuneration' for the purposes of holiday pay calculations.
- What is the relevant series of deductions, if any, for each individual Claimant.
Arguments of the Parties
Claimants' Arguments
- Non-guaranteed overtime (shift overruns) is part of their contractual obligations and should be included in holiday pay calculations.
- Voluntary overtime is not contractually required but may be part of normal remuneration if sufficiently regular.
- Statutory holiday pay under the WTR and WTD should include non-guaranteed overtime payments.
- Voluntary overtime should not be included unless it forms part of normal remuneration based on frequency.
Respondent's Arguments
- Accepts that non-guaranteed overtime should be included in statutory holiday pay calculations under the WTR and WTD.
- Denies that voluntary overtime should be included in either contractual or statutory holiday pay calculations.
- Contends that voluntary overtime is purely voluntary, with no contractual obligation, and the organisation has alternative means to cover shifts without relying on voluntary overtime.
- Disputes the regularity and intrinsic link of voluntary overtime to the performance of contractual duties, distinguishing it from non-guaranteed overtime.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| British Airways plc v Williams and others [2012] ICR 847 CJEU | Establishes that holiday pay must include all components of normal remuneration intrinsically linked to the performance of contractual tasks, calculated over a representative reference period. | The tribunal applied Williams to distinguish between pay components intrinsically linked to contractual duties (non-guaranteed overtime) and those not (voluntary overtime), concluding non-guaranteed overtime must be included in holiday pay. |
| Bear Scotland Ltd v Fulton & others and Hertel (UK) Ltd & another v Woods and others [2015] ICR 221 | Clarifies that non-guaranteed overtime, which employees are obliged to perform if requested, forms part of normal remuneration for holiday pay purposes, while voluntary overtime does not necessarily. | The tribunal relied on Bear Scotland to conclude that non-guaranteed overtime must be included in holiday pay calculations, affirming the Respondent’s concession on this point. |
| Lock v British Gas Trading Ltd [2014] ICR 813 | Commission or pay linked directly to work performed must be included in holiday pay calculations. | Used to support the principle that payments directly linked to contractual work, such as non-guaranteed overtime, are part of normal remuneration for holiday pay. |
| Patterson v Castlereagh Borough Council [2015] NICA 47 | Voluntary overtime may be included in holiday pay if it is sufficiently regular and forms part of normal remuneration; this is a factual determination. | The tribunal acknowledged Patterson but found on the facts that voluntary overtime in the present case was irregular and voluntary, thus not forming part of normal remuneration for holiday pay. |
| Bamsey v Albon Engineering & Manufacturing plc [2004] IRLR 457 CA | UK law alone does not permit inclusion of overtime in the calculation of a week’s pay. | Claimants relied on EU law to argue inclusion of overtime; the tribunal noted this distinction and the Respondent’s acceptance based on EU law application. |
Court's Reasoning and Analysis
The tribunal carefully analyzed the contractual terms incorporated from the NHS Terms and Conditions of Service, focusing on Clause 13.9 regarding pay during annual leave. It found that this clause includes "regularly paid supplements" such as payments for work outside normal hours but does not explicitly cover overtime payments.
The tribunal distinguished between two categories of overtime: non-guaranteed overtime ("shift overruns") which Claimants are contractually obliged to perform to complete their tasks, and voluntary overtime which Claimants may choose to undertake without obligation.
Evidence showed that non-guaranteed overtime is an essential part of the Claimants’ contractual duties, as they cannot leave tasks unfinished at shift end, thus forming part of their pay for holiday calculations. Voluntary overtime, however, was found to be irregular, optional, and not contractually required. The Respondent has alternative staffing arrangements to cover voluntary overtime needs.
In statutory terms, the Respondent conceded that non-guaranteed overtime must be included in holiday pay calculations under the WTR and WTD, consistent with EU law and relevant case law, including Bear Scotland and Williams.
The tribunal applied the principle from Williams that holiday pay must reflect normal remuneration intrinsically linked to contractual duties, assessed over a representative reference period. It concluded that non-guaranteed overtime met this test, while voluntary overtime did not.
Regarding voluntary overtime, the tribunal acknowledged the Patterson decision, which allows for voluntary overtime to be included if it is sufficiently regular. However, on the facts, the tribunal found no consistent pattern of voluntary overtime sufficient to constitute normal remuneration.
The tribunal noted that if the voluntary overtime issue were to be reconsidered, a case-by-case factual assessment would be necessary, which had not yet been carried out.
The tribunal did not address remedy or limitation issues, which were reserved for a later hearing if necessary.
Holding and Implications
The tribunal held that:
- Non-guaranteed overtime (shift overruns) forms part of the Claimants’ contractual pay and must be included in the calculation of holiday pay under both contractual and statutory provisions, consistent with the Working Time Regulations and Directive.
- Voluntary overtime is not contractually required and does not form part of pay for the purposes of calculating contractual holiday pay.
- Voluntary overtime does not form part of statutory holiday pay unless it is sufficiently regular to constitute normal remuneration; on the facts, it was not sufficiently regular.
Implications: This decision confirms the importance of distinguishing between compulsory and voluntary overtime in holiday pay calculations. It affirms the application of EU law principles as interpreted in key precedents, requiring inclusion of pay components intrinsically linked to contractual duties. The ruling affects the calculation of holiday pay for the Claimants but does not establish new legal precedent beyond the application of established case law.
Alert