Tarmac Roadstone Holdings Ltd v Peacock: CA 1973

Overtime hours are not part of normal working hours when calculating redundancy payments unless they are obligatory on both sides, that is, contractually guaranteed by the employer and compulsory for the employee.
Lord Denning MR said: ‘First, where there is a fixed number of compulsory working hours, and thereafter overtime is voluntary on both sides – so that the employer is not bound to employ the man for any overtime and the employee is not bound to serve it – then, although the overtime is worked regularly each week, nevertheless, being voluntary, it does not count as part of the normal working hours. Such a situation is covered by paragraph 1(1).
Second, when there is a fixed number of compulsory working hours and in addition a fixed period of overtime which is obligatory on both sides – so that the employer is bound to provide that overtime and the employee bound to serve it – then that fixed period of overtime is added to the fixed period of compulsory working hours so that the total number counts as the normal working hours. Such a situation is covered by paragraph 1(2). In short, ‘guaranteed overtime’ counts as part of normal working hours.Third, where there is a fixed number of compulsory working hours, and overtime is obligatory on the man if asked but not on the employer – so that the employer is entitled to call on the man to work overtime but is not bound to call upon him to do so, then the overtime does not come within the normal working hours. Such a case seems to me to come within paragraph 1(1). It comes within the words ‘the employee is entitled to overtime pay when employed for more than a fixed number of hours in a week…’ It does not come within the words of paragraph 1(2), because the contract of employment does not ‘fix’ the number of hours of employment. The overtime is not fixed but is at the option of the employer.’

Judges:

Lord Denning MR

Citations:

[1973] ICR 273

Jurisdiction:

England and Wales

Cited by:

Cited – British Airways Plc v Williams and Others SC 24-Mar-2010
The court was asked as to the calculation of annual leave pay for crew members in civil aviation under the Regulations. The company argued that it was based on the fixed annual remuneration, and the pilots argued that it should include other . .
Lists of cited by and citing cases may be incomplete.

Employment

Updated: 17 June 2022; Ref: scu.406181