Holiday Pay for Overtime

2019-02-22 16:05:28

The current legal position in respect of holiday pay calculations in respect of overtime is as follows:

  • Compulsory non-guaranteed overtime – this should always be included in holiday pay calculations.
  • Guaranteed overtime – should always be included
  • Voluntary overtime – if such overtime is sufficiently regular or re-occurring so that it qualifies as “normal”, it should be included. As there is no definition for what is “normal”, it becomes a matter of fact and degree. It is possible that voluntary overtime worked every 4 or 5 weeks could be seen as “normal”.


There are two types of apprenticeship:

  • A Contract of Apprenticeship – this covers a traditional apprenticeship arrangement, the primary object being to offer training to an individual rather than to perform work for the employer. Termination by the employer can only be done in limited circumstances eg closure of the business or severe misconduct.
  • Apprenticeship Agreement – this is entered into under the apprenticeships, Skills, Children and Learning Act 2009 which is more akin to a standard employment contract although it is an agreement between three separate parties being the apprentice, employer and a training provider. Such an agreement makes it clear that the apprentice works for the employer with the training provider giving the training element with the terms of the agreement with the apprentice receiving a recognised qualification at the end of the same. Termination of an “Apprenticeship Agreement” can be done in the usual way (subject to unfair dismissal) but if the Agreement is for a fixed term, the employer becomes liable to pay the salary for the full term if the Agreement terminates unless the Agreement states otherwise.