Should regular overtime be taken into account when calculating weekly earnings for redundancy pay purposes?
Statutory redundancy pay is calculated using a formula that includes the employee's gross weekly pay, subject to a maximum. A week's pay is calculated based on the employee's "normal working hours" in a week or the average working hours in a 12-week period if their hours vary. Overtime is included in "normal working hours" only if the employee is entitled to overtime under the contract of employment, ie if the employer must provide overtime and the employee must work it. In that situation, the overtime pay will count towards a week's pay for the purposes of calculating statutory redundancy pay.