Breaking News: Commission Element of Holiday Pay

Breaking News: Commission Element of Holiday Pay

Queries about holiday entitlement are amongst the most common questions that employers raise with us at Consensus HR.

The answer is… it varies, but it there is a set formula! The amount of holiday that an employee can take is calculated according to the days and the hours that he/she works.

If a person is working full-time, five days each week, his/her entitlement is 28 days a year including Bank Holidays (if your contract has been drafted to say so!).

A recent case involved Mr Lock and his employer, British Gas. In Lock v British Gas, Mr Lock argued that he is entitled to holiday pay that includes an element for the amount of commission he would normally receive when working.  Mr Lock won his case.

British Gas (the employer) argued that it amounted to “judicial vandalism” to follow the European Court of Justice (ECJ) jurisprudence and ignore the plain meaning of the Working Time Regulations.

Mr Lock was paid basic salary and results-based commission but only basic pay during leave. An employment tribunal (ET) held that results-based commission must be included when calculating holiday pay and that it was possible to read words into the Working Time Regulations. British Gas appealed but was dismissed by the Employment Appeals Tribunal (EAT)

Are you unsure of what holiday pay your employees are entitled to?

Would you like to ensure you are following and are always up to date with current employment legislation?