• Court of Appeal rules voluntary overtime should be included in holiday pay calculations
  • Unison says ruling could benefit “tens of thousand” NHS staff
  • EEAST plans to appeal ruling to Supreme Court

NHS trusts could face substantially increased pay bills after the Court of Appeal ruled that voluntary overtime should be taken into account when calculating holiday pay. 

Trade union Unison, which brought the case on the behalf of 13 ambulance staff at East of England Ambulance Service Trust, said the judgment could benefit “tens of thousands” NHS staff employed under Agenda for Change who do regular overtime. 

The level of pay during holiday will now have to be based on earnings over the last three months, including all types of overtime.

The case was first heard by an employment tribunal in 2017. The tribunal decided mandatory and non-guaranteed overtime should be included in holiday pay calculations but voluntary overtime should not.

Unison and the employees appealed. In April 2018, the Employment Appeal Tribunal decided against the judgment, noting the Agenda for Change contract stated holiday pay should include “regularly paid supplements including any recruitment and retention premia, payment for work outside normal hours and high cost area supplements”. The Agenda for Change contract also states that holiday pay should be calculated using income from the previous three months or what has been agreed locally.

In a judgment earlier this week, the Court of Appeal sided with the Employment Appeal Tribunal decision that no distinction should be drawn between mandatory and non-guaranteed overtime – for example, shift overruns where staff could not leave a patient or finished some distance from base – and voluntary overtime when calculating holiday pay for Agenda for Change staff. In his leading judgment, Lord Justice Bean said, if AfC had intended to draw a distinction between basic pay and overtime in the calculation of holiday pay, it would have done so.

The Court of Appeal also ruled that voluntary overtime should also be taken into account for calculating holiday pay under the Working Time Directive, which may mean the decision also affects workers not on an Agenda for Change contract. However, Lord Justice Bean declined to refer this question to the Court of Justice of the European Union as the employees in this case had already won on the basis of the AfC contract. 

Unison general secretary Dave Prentis said: “Before today’s judgment NHS workers who did regular overtime or often worked well beyond their shifts saw a drop in their pay whenever they took a well-deserved break.

“Leave calculations that weren’t based on the extra shifts and hours they did week in and week out meant many were considerably out of pocket.”

In a statement, EEAST said: “As a trust we are committed to offering our staff good rates of pay, a generous holiday entitlement and great working conditions.

“However, giving careful consideration to the Court of Appeal’s decision, we are not satisfied with the interpretation of the law in either of the judgments made [both the contractual argument and the Working Time Directive argument].

”We remain concerned at the impact these decisions could have both on ourselves and other NHS employers, and we have instructed our legal representatives to appeal to the Supreme Court on both judgments.”