There has been yet more news regarding the issue of holiday pay.

Back in April 2015, the Employment Tribunal decided in Lock v British Gas Trading Limited that commission which forms part of an employee’s normal remuneration should be taken into account when calculating how much holiday pay they should receive.

British Gas, perhaps unsurprisingly given what was at stake, appealed against that decision on the basis that the Tribunal shouldn’t have interpreted the Working Time Regulations (WTR) in the way they did. The Employment Appeal Tribunal (EAT) has decided that the Tribunal were correct in their decision and that the WTR could be interpreted in order to include commission payments in the holiday pay calculation. Unfortunately, there is still no guidance on how holiday pay should be calculated.

In the circumstances, the position remains unchanged. However, it is believed that British Gas is considering taking the matter to the Court of Appeal.

We have previously prepared a guidance note to answer some common questions on this issue, which has been updated in light of the recent EAT decision. Clients can find this by logging into My EW by clicking on the link which can be found at the top of every page of the website. You can find the document in Employment Law & HR Essentials > Holidays. The document is called ‘Holiday and Commission FAQs’.

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