The European Working Time Directive gives workers and employees the right to four weeks of paid annual leave every year. This leave is known as statutory annual leave.
The Working Time Regulations give workers and employees the right to an additional 1.6 weeks’ leave.
Employees can also be granted contractual annual leave as part of their terms and conditions of employment. For example, RCN members employed under Agenda for Change (AfC) are entitled to 27 days, 29 days or 33 days annual leave (inclusive of the four weeks statutory annual leave).
Workers and employees have the right to be paid their ‘normal’ pay during a period of annual leave. Historically, normal pay included things such as productivity bonuses and results-based commission payments. It also includes overtime.
For the purposes of annual leave pay, overtime falls into three categories.
- Contractual overtime – that which your employer must offer you and you must work as a term of your employment contract.
- Non-contractual compulsory overtime – that which your employer does not have to offer you, but if it does, you must work it.
- Voluntary overtime – that which you can refuse to work if offered.
In all cases, overtime is classed as hours worked in excess of your minimum contracted hours. It therefore applies to members working part-time hours as well as members working full-time.
Annual leave pay
Workers and employees have the right to have contractual overtime taken into account when calculating annual leave pay. In 2014, in the case of Bear Scotland & Others v Fulton and Others, the Courts decided that workers and employees also had the right to have non-contractual compulsory overtime taken into account when calculating holiday pay for the four weeks’ statutory annual leave granted by the Working Time Directive. In 2019, in the case of East of England Ambulance Service NHS Trust v Flowers and Others, the Courts extended this to include regularly worked voluntary overtime. The Courts also decided that overtime had to be taken into account when calculating pay for annual leave granted under Agenda for Change.
For RCN members employed on Agenda for Change terms and conditions, overtime must be taken into account when calculating pay for all your annual leave.
For RCN members not employed on Agenda for Change terms and conditions, overtime must only be taken into account when calculating pay for your four weeks’ statutory annual leave granted by the Working Time Directive. This does not apply to the additional 1.6 weeks leave granted by the Working Time Regulations.
For all RCN members, overtime will only count towards annual leave pay if you have been paid for that overtime. If, for example, you have taken time off in lieu, this time would not count when calculating annual leave pay.
Incorrectly paid annual leave
If you think you have not been paid correctly for your annual leave, you should approach your employer in the first instance. You should raise this with your line manager, using one of the letter templates below:
Please do not delay in taking action if you believe you have not been paid correctly for your annual leave. If your line manager cannot or will not help, you should contact us for further advice.
The time limits for making an Employment Tribunal claim are 3 months less 1 day from the date you received your last incorrect annual leave payment. In some circumstances, you may also be able to bring a County Court claim. If you believe you need to make a legal claim, you should contact us for further advice.