Readers will remember that last year, the CJEU issued a landmark decision that holiday pay must include commission. The matter was then remitted back to the Employment Tribunal in Leicester to determine whether the Working Time Regulations 1998 could be interpreted so as to give effect to EU law.
The Employment Tribunal has now issued its decision in the Lock v British Gas case.
Mr Lock was a salesman for British Gas who received basic pay and variable commission payments. Commission was calculated on the basis of the sales he achieved. When Mr Lock was on annual leave he was only paid basic pay and he did not have the ability to generate any sales. For further details see one of our earlier e-updates here.
The Employment Tribunal has now decided that the Working Time Regulations can be interpreted so as to include commission payments when calculating holiday pay for employees whose pay normally includes an element of commission. This applies to the 4 weeks' annual leave granted under Regulation 13 of the Working Time Regulations and not to the additional 1.6 weeks granted under Regulation 13A. A copy of the full decision can be found here.
This decision is unsurprising. The Employment Tribunal reminded us that in Bear Scotland v Fulton and others, the EAT held that non guaranteed overtime should be included in the holiday pay calculation and the judge in the latest case considered that there was 'no difference in principle between payment of non guaranteed overtime and payment in respect of commission so far as annual leave pay is concerned'.
This is unlikely to be the last decision on what should and shouldn’t be included in holiday pay so - keep watching this space!