Holiday pay and commission - a quick recap

Last week we spent two days in the Leicester Employment Tribunal whilst the Tribunal re-considered Mr Lock’s claim relating to commission and holiday pay. You may have even seen our tweets, live from the Tribunal itself @DWF_Employment

Just to recap Mr Lock’s salary comprised a basic salary and commission payments which were based on his sales. His commission made up over 60% of his total remuneration. When he was on holiday Mr Lock received an average of his pay over the preceding 12 weeks before he took the holiday.

However, he could not make any sales whilst on holiday and therefore he pursued a case to Tribunal on the basis that he suffered a loss in commission because it dropped in the period after he returned from leave.

The CJEU concluded that the Working Time Directive (WTD) must be interpreted as precluding national legislation and practice which allows a worker whose remuneration consists of a basic salary and commission, to be paid remuneration composed exclusively of his basic salary during periods of annual leave. In other words commission must be factored in when calculating holiday pay.

The case then reverted back to the Tribunal to decide, on the facts of the case, whether British Gas has adequately factored in commission payments when calculating Mr Lock’s holiday pay.

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.


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Andrew Chamberlain

Partner - Head of Employment & Chair of the SDE

I am a Partner, the National Head of the Employment Team and the Chair of the Service Delivery Executive (SDE), which is focused on building better solutions for clients.