The judgement in Dudley Metropolitan Borough Council v Mr G Willetts and Others has been issued almost a year after it was confirmed that the case would be appealed to the EAT. The case concerns whether voluntary overtime, call out payments and mileage and standby payments should be included in the calculation of holiday pay. As we previously reported, the Employment Tribunal found that, for those employees that regularly worked voluntary overtime, the payments were "normal remuneration" and should be included in the calculation of holiday pay. Under the EU Working Time Directive holiday pay must correspond to "normal remuneration" to ensure employees are not deterred from taking holiday.
The EAT have upheld the decision of the Tribunal bringing some much needed clarity to an area of law which seems to have been continually evolving for the past few years. Taking into consideration that the Court of Justice of the European Union had set down that holiday pay must correspond to normal remuneration, the EAT were of the view that for a payment to count as normal it must be paid over a sufficient period of time on a recurring basis.
The EAT were satisfied that the payments were made with sufficient regularity to amount to normal remuneration, even if they were made only every month or five weeks. In this case the EAT also found that the payments were all directly linked to the tasks required by the contract of employment.
There are some limitations to this decision which should be noted. Firstly, the claim before the EAT related only to the 4 week period of holiday provided for by the Working Time Directive. Secondly, the EAT acknowledged that the question of whether a payment was normal remuneration was a "question of fact and degree" for a Tribunal so employers will still have to take a view in situations where the regularity of the payment is not so clear cut.