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Overtime working: does it affect annual leave entitlement (Ireland)

Hi Guys,

Just looking for some guidance and advice on employees working overtime and if any additional compensation is required against annual leave. I have researched, also I have reached out to my many HR colleagues and no one can answer the question (we are in the process of signing up with an employment law provider - awaiting final sign off).

We have employees working a 39 week, with an annual leave entitlement of 25 days per year (Holiday year runs Jan-Dec). There is no entitlement to overtime. However, we have a number of employees working overtime to meet business demands and are being paid to reflect the additional hours worked. A question has been raised with regards to their actual payment of salary during annual leave. So for example, we could have employees working an additional 10 hours per week, their salary is reflected accordingly and this could be over a period of 4 months.

If they take annual leave within this period of working overtime obviously they get paid their holiday pay. But as a salaried employee it would be at their normal rate, therefore their salary would go back down to reflect their normal gross salary. Should we be getting an average of their working week by going back 13 weeks and applying that against their period of annual leave. Therefore giving them a slight increase in their salary when taking annual leave.

As I mentioned I have researched including the Conditions of employment act 1936 and on review I am slightly confused as to the wording:

Section 25 - Remuneration during annual leave

http://www.irishstatutebook.ie/eli/1936/act/2/section/25/enacted/en/html#sec25

Does it mean that O/T will not be included and therefore no average calculation needs to be obtained using the 13 week rule?

Many thanks

Vicky

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  • The Dudley ruling at the ECJ last year made it clear that regular overtime should be included to calculate average earnings with respect to holidays taken up to and including the 20 days minimum European leave entitlement. I can see no reason why Irish employment law could be exonerated from this ruling. Payments for any leave above the four weeks minimum could be potentially excluded .
    Hope this helps you.
  • In reply to Ray:

    Hi Ray,

    Really appreciate your speedy feedback on this. I have just read the ruling on this and I would be of the same understanding that Ireland would have follow lead based on it being a ECJ ruling. However current Irish legislation has no mention of this practise, therefore should I apply the 13 week rule in obtaining an average? Would that be the best approach?
    Thank you
    Kind regards
    Vicky
  • In reply to Vicky Dolan:

    The technical answer in UK practice is is to apply the 12 or 13 week average. In practice I understand that many companies calculate an average that is easier for their payroll systems to handle - look at this recent post from Robey-  whilst knowing that it is not 100% compliant

    Good luck Vicky

  • In reply to Ray:

    Thank you Ray!
  • In reply to Vicky Dolan:

    Hi Vicky,

    This is dealt with in S.I. 475/1997

    Have a look here in section 3:

    www.irishstatutebook.ie/.../print