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Overtime payments and pay during annual leave

Read the agreement on how employers should calculate overtime pay whilst on annual leave.
Agenda for change

12 March 2021

The NHS Staff Council has agreed a framework to enable NHS employers in England to resolve issues in relation to the correct calculation of pay while on annual leave, in respect of regularly worked overtime and additional standard hours (AST), under the NHS terms and conditions of service (Agenda for Change).

Section 13.9 of the NHS terms and conditions of service states that:

'Pay during annual leave will include regularly paid supplements, including any recruitment and retention premia, payments for work outside normal hours and high cost area supplements. Pay is calculated on the basis of what the individual would have received had he/she been at work.'

The national discussions that have taken place now clarify how NHS employers should interpret section 13.9 of the NHS terms and conditions of service. It is now accepted that employers should include regularly worked overtime and additional standard hours in the calculation of pay when staff are on annual leave.

This agreement is for England only. An agreement has already been reached in Scotland. Employers in Cymru Wales and Northern Ireland have indicated they will enter discussions with trade unions to resolve this issue.

Download the framework agreement. 

Corrective payments

Corrective payments will be made in respect of the period covering the financial years 2019/2020 and 2020/2021.

The corrective payments will be based on overtime earned in the financial years 2019/2020 and 2020/2021. To be eligible for a corrective payment in either or both financial years a member of staff will need to meet the eligibility criteria set out in the framework agreement.

More details on the eligibility criteria and how the corrective payment is calculated can be found in the supporting FAQ sections below.

Existing claimants

NHS employers and trade unions have agreed to work collectively (both nationally and locally) to resolve outstanding legal claims.

The existing legal claims lodged in the Employment Tribunal or the County or High Court, will be resolved through local settlement discussions between the relevant employer and the claimant along with their legal adviser.

Future application

NHS Employers is working on guidance for the future application of annual leave pay in respect of regularly worked overtime under the NHS terms and conditions of service (Agenda for Change). Please continue to check this section for further information.