The workers were employed in the Bromley and Camden council areas by the French owned company, Veolia Environmental Services.
Their union, Unite, brought a test case relating to overtime payments. The Employment Tribunal found that voluntary overtime worked by the refuse collectors was part of their normal pay because there was an intrinsic link between that overtime and their role in the company.
In addition, the overtime was carried out with sufficient regularity to be part of their normal pay.
The effect is that the voluntary overtime must be included when calculating the first 20 days of holiday pay in accordance with EU law.
In addition, contractually agreed overtime must be included for the first 28 days’ holiday in accordance with UK law.
Initially, Veolia said it had not included the overtime pay in holiday calculations because of uncertainty over Brexit, but it didn’t pursue this during the hearing.
Unite’s national officer for local government, Fiona Farmer, said: “This is a significant landmark case. This judgment will have widespread implications for the several thousand members we have working for Veolia Environmental Services across the UK, who should be getting average holiday pay and could be in line for backdated payments”.
A Veolia spokesperson said: “We will examine our position further and continue to be in dialogue with Unite. We remain committed to complying with all of our legal obligations toward our employees.”
The Employment Appeal Tribunal reached a similar conclusion in a case involving Dudley Council and 56 of its employees. It held that payment for voluntary overtime that was carried out regularly was “normal remuneration” for the purposes of calculating holiday pay, irrespective of whether the obligation to perform the work was in the employment contract or not.
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