Fastening the Lock: Court of Appeal hands down holiday pay judgment in British Gas v Lock
Following on from our earlier updates ‘It’s official – holiday pay must include voluntary overtime and commission’, ‘Lock v British Gas – ruling on commission and Holiday Pay’ and ‘Locking commission into holiday pay – EAT confirms position after a trip to the European Court of Justice’ the English Court of Appeal has now fastened the lock and upheld the EAT’s decision that the Working Time Regulations can be interpreted such that holiday pay should include results-based commission payments for the basic four weeks’ annual leave provided for by EU law.
Mr Lock’s claim was first heard in the employment tribunal in 2012 and the outcome has ultimately remained the same at every turn – commission should be included in the holiday pay calculation. The finer details of how to calculate this however remain unclear.
When questions arose in the Court of Appeal in relation to how to factor bonuses and commission payments in to the holiday pay calculation the court declined to answer them.
What is clear however, is that a worker with normal working hours’ holiday pay should be calculated with reference to their “normal remuneration” which includes commission payments that the worker would have received had they been at work, and not on holiday.
This decision comes after other holiday pay decisions in the EAT and Northern Irish Court of Appeal that holiday pay should include non-guaranteed or voluntary overtime, voluntary standby and voluntary call out payments, because these payments were intrinsically linked to the performance of the job so formed part of the employee’s “normal remuneration”.
That is not to say that the current holiday pay position is set in stone – the Lock may be re-opened with an appeal to the Supreme Court – and it is likely that the tribunals will approach the issues on a case-by-case basis. Please contact Katy Wedderburn for more information.