Door closed on Lock case?
We now have an Employment Appeal Tribunal (EAT) decision that upholds last year’s tribunal decision...
British Gas Trading v Lock
Well, not exactly. But we now have an Employment Appeal Tribunal (EAT) decision that upholds last year’s tribunal decision.
The tribunal had decided that Mr Lock’s results-based commission payments should form part of his holiday pay calculation. Leaving commission out of the equation had meant that he would earn less while on annual leave than he would if he were working – he wouldn’t be getting his ‘normal’ pay - and that wasn’t consistent with the rules on working time.
That position has now been reinforced by British Gas’ unsuccessful EAT appeal. But before you get too comfortable, there is going to be another appeal – this time to the Court of Appeal. So there's still a bit of 'wait and see'.
While the current state of play is that holiday pay for workers’ four weeks’ statutory holiday must include commission, some uncertainty remains. It is a difficult area for employers to navigate until there’s firm guidance on the practicalities of calculating future holiday pay, and reimbursing staff for past underpayments.
If you are an employer that pays salaries that include variable elements, it’s certainly worth getting some advice on your existing arrangements and on your exposure to claims.