So, it appears the rumours are true. Neal v. Freightliner Limited (the voluntary overtime holiday pay case) would appear to have settled as it does not appear in this week’s Employment Appeal Tribunal (EAT) cause list. However, the Employment Appeal Tribunal will still be hearing the co-joined appeals of Bear Scotland Limited v. Fulton & Baxter, Hertel (UK) Limited v. Wood & Others and Amec Group v. Law & Others.
The co-joined appeals are listed for a 3 day hearing before the EAT President, the Honourable Mr Justice Langstaff, commencing this Wednesday, 30 July.
In Bear Scotland v Futon, the Tribunal went further than the decision in Neal v. Freightliner by deciding that voluntary overtime must be included in the calculation of holiday pay for the entire 5.6 weeks of holiday provided under the Working Time Regulations 1998, and not the four weeks required by the Directive. In Hertel (UK) Limited and Amec Group, the Tribunal also decided that voluntary overtime should be included but limited its decision to the four weeks required by the Directive.
Both decisions were reached by the Tribunals treating the employees as having no normal working hours. This potentially creates knock-on issues beyond the calculation of holiday pay and in Hertel (UK) Limited and Amec Group required the Tribunal to read in additional wording to avoid the inclusion of unintended amounts being included in the calculation of holiday pay. In so doing, it created added complexity to an already overly complicated point.
While the arguments raised this week in the EAT are likely to be highly technical, the outcome of these appeals is important as it could have significant implications on a large number of employers who offer but do not guarantee overtime. Given the current uncertainties created by the Tribunal decisions mentioned above, it is only hoped that the Honourable Mr Justice Langstaff will give employers much needed guidance on this issue, particularly for those employers who are still adopting a “wait and see” approach.