Global menu

Our global pages

Close

EU ruling on holiday pay and voluntary overtime

  • United Kingdom
  • Employment law

13-12-2018

The EU Court of Justice has today issued a judgment that suggests employers might not have to factor pay for overtime into holiday pay calculations unless the worker is contractually obliged to work overtime.

The CJEU ruled that pay received for overtime work need not be taken into account unless the obligations arising from the employment contract require the worker to work overtime on a broadly regular and predictable basis, and the corresponding pay constitutes a significant element of the total remuneration that the worker receives for his professional activity. Although not entirely unambiguous, this could be interpreted as meaning that one of the conditions that must be satisfied before overtime pay must be taken into account is that the worker’s contract requires them to work the overtime.

The case before the CJEU, Hein v Albert Holzkamm GmbH & Co, was one involving mandatory, rather than voluntary, overtime. Nevertheless, the CJEU’s comments about overtime pay cast some doubt over recent decisions from the Employment Appeal Tribunal to the effect that pay for voluntary overtime must be factored in to holiday pay provided it is paid over a sufficient period of time on a regular or recurring basis. One of those cases, Flowers v East of England Ambulance Trust, has been appealed further; so we can expect the Court of Appeal to consider the implications of today’s CJEU decision at some point next year. If we don’t leave the EU in March without a transition period, it is possible that the Court of Appeal will refer the case to the CJEU for a ruling specifically on the issue of voluntary overtime, in which case the law on this issue could remain uncertain for at least another two years.

Today’s judgment also addresses the issue of holiday entitlement for those on short-time work, ruling that whilst periods of short-time working may reduce that minimum period of leave to less than four weeks, they do not reduce the amount of pay due when leave is taken.

Judgment in Hein v Albert Holzkamm GmbH & Co, CJEU, 13 December 2018

For more information contact

< Go back

Print Friendly and PDF
Subscribe to e-briefings