The EAT has dismissed the appeal of British Gas in Lock -v- British Gas Trading Ltd 2016, with the result that remuneration for annual leave must include commission in addition to basic pay. The EAT declined to distinguish Lock from the related case of Fulton -v- Bear Scotland 2015, which concerned overtime pay.
Mr Lock was employed by British Gas as a salesman. He received basic pay, plus commission for sales achieved. During periods of annual leave, commission in respect of his previous sales was paid out but he was not able to earn any new commission. This meant that on his return from holiday he was subsequently paid less than he would normally receive, as a result of having taken holiday (and not making any sales / earning any new commission during that period). The ECJ held in 2014 that under the Working Time Directive, results-based commission paid to an employee which is not dependent on the amount of work done by that employee must be taken into account in the calculation of holiday pay. An employment tribunal held last year that domestic legislation could be interpreted consistently with this requirement.
In dismissing the appeal, the EAT has confirmed that the Working Time Regulations can be read consistently with the Directive by implying words into the Regulations. There was no reason to depart from the reasoning of the EAT in Bear Scotland. Although the EAT was not strictly bound by its own previous decision it would only depart from it where the earlier decision was manifestly wrong or where such a departure could be justified by exceptional circumstances. According to Mr Justice Singh, if Bear Scotland was wrongly decided, “then it must be for the Court of Appeal to say so, not [the EAT].”