As expected, the Court of Appeal has now upheld the Employment Appeal Tribunal’s decision in British Gas Trading v Lock that results-based commission should be taken into account for the purposes of calculating workers’ statutory holiday.
The Court of Appeal concluded that it was permissible to read an additional sub clause into the Working Time Regulations 1998 to this effect since this legislation was enacted solely to implement the relevant European Directive into UK law and must, therefore, have been intended to fulfil all of the relevant obligations. It was willing to go against previous domestic case law in this regard, in light of the European Court of Justice’s confirmation of its view.
As such, British Gas’ appeal was dismissed, although it is understood that the company will now pursue the case to the Supreme Court.
In the meantime, the Court of Appeal provided no further guidance in terms of reference periods or otherwise, leaving employers unclear as to the correct way in which to calculate holiday pay.
Whilst the Prime Minister has, in the context of the Great Repeal Bill, recently pledged to retain existing workers’ rights post-Brexit, the complexity of calculating holiday pay is becoming increasingly unpopular with employers and it has been identified as a subject of possible future reform.