Summary Sentence:

The Complainant’s rate of pay for annual leave was found to properly include regularly rostered overtime and allowances, and his rate of pay for public holidays was found to properly include allowances only.

Background:

The Complainant has worked for the Respondent since November 1984. In that time, the Complainant received a rate of basic pay, but also received additional regularly-scheduled overtime, a “machine washing” payment, and an allowance for eating on-site. The Complainant argued that all of these payments comprise the Complainant’s “weekly wages” for the purpose of calculating his rate of pay for annual leave and public holidays. However, the Respondent has only paid the Complainant his basic pay for annual leave and public holidays, resulting in the Complainant receiving significantly less remuneration when on annual leave and on public holidays than he would have had he worked on those days. The Complainant cited recent Labour Court decisions in this area, most notably Ryan v Carlow Co Council (DWT2312) and European cases which supported this position. The Complainant also argued on that basis that any shortfall based on this underpayment should be calculated back to the Complainant’s date of employment in 1984.

The Respondent said it calculated annual leave and holiday pay pursuant to the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 (S.I. No 475 /1997) and as a result the Complainant’s claim had no merit.

Outcome: 

The Adjudication Officer had regard to the Labour Court and European case law cited by the Complainant, in particular the decision in Ryan v Carlow County Council. The Adjudication Officer found that, pursuant to those decisions, regularly-worked overtime which comprises a significant part of the Complainant’s compensation and the Complainant’s machine/truck washing payments should be included as part of the Complainant’s remuneration for periods of annual leave, although the on-site eating allowance should not be included. In respect of public holidays, the Adjudication Officer found that no provision requires the payment of regularly-worked overtime in such situations, although the machine/truck washing payments should be included in the rate of pay calculation for public holidays.

Practical Guidance for Employers: 

If an employee works overtime on a regular basis, payment in respect of that overtime can be considered part of the employee’s regular weekly wages and so payment for that overtime should be provided during the employee’s annual leave as well.

The full case is here: https://www.workplacerelations.ie/en/cases/2024/april/adj-00037752.html