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Holiday pay and commission

issues to be discussed in the forthcoming appeal in Lock v British Gas

The case of Lock v British Gas Trading Limited will be heard by the Employment Appeal Tribunal (“EAT”) on the 8th and 9th of December, hopefully bringing employers a step closer to certainty over the position regarding commission and holiday pay.  In light of this, it is worth considering the developments so far and what answers we can expect from the EAT.

Decision of the Employment Tribunal in Lock

Following the Bear Scotland v Fulton decision, we now have clarity that non-guaranteed overtime must be included when calculating holiday pay.

In Lock, the Employment Tribunal asked the Court of Justice of the European Union (“CJEU”) whether the Working Time Directive (“WTD”) required commission payments to be included in holiday pay. The CJEU held that, where a worker’s remuneration includes contractual commission, determined with reference to sales achieved, the WTD precludes a national law that calculates statutory holiday pay based on basic salary alone. This could deter employees from taking annual leave and would be contrary to the Directive’s purpose.

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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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Hannah Robbins

Partner

I am a very experienced employment lawyer and advocate in tribunal. I act on the full range of contentious and non-contentious employment issues.