Earlier this year, we reported that commission must now be included when calculating holiday pay.
Since that announcement, the EAT has heard three important holiday pay cases on the issue of overtime. The judgments have just been announced. It's official – the EAT has said that commission and voluntary overtime must now both be included when calculating holiday pay.
These decisions will have huge financial implications for employers who do not currently take voluntary overtime and commission into account when calculating holiday pay. Employers could be faced with claims for unpaid holiday pay spanning several years. They should also review their annual leave pay arrangements to ensure that voluntary overtime as well as commission payments are factored in to holiday pay going forward.
Employers who are affected should also consider the potential value of the arrears claims, and how they will communicate with their workforce.