0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

Forgotten your password?

Employees entitled to holiday pay which takes account of commission

25 February 2016

The Employment Appeal Tribunal (EAT) has given judgment in the case of Lock & ors v British Gas Trading Limited, which looked at whether an employee’s holiday pay should take into account commission earned where pay is in part commission based. A considerable portion of Mr Lock’s wages (about 60%) were made up of sales commission. As a result, he would receive holiday pay based on his basic wage only, which was argued as being a considerable disincentive to take leave. In addition, his commission payments in following months would also be lower because he had been unable to generate sales while on holidays.

Having considered whether there was a conflict between domestic and European law, the EAT confirmed that commission payments should be taken into account when calculating the four weeks’ annual leave provided for by the EU Working Time Directive (as the further 1.6 weeks leave making up the statutory minimum leave entitlement is granted by our domestic legislation). This judgment is in line with the earlier case of Bear Scotland v Fulton which confirmed that non-guaranteed overtime should be taken into account when calculating holiday pay.

Unfortunately, this case hasn’t provided the much needed clarification employers will have wanted. An appeal is already pending on Bear Scotland and we are yet to see whether a similar appeal will be lodged in this case. Even if the case is not taken further, the judgment failed to clarify what would be an appropriate reference period for averaging pay when calculating holiday pay.

Related opinions

Equal pay at ASDA stores - appeal to the Supreme Court unsuccessful

35,000 workers working in ASDA’s retail business sought to compare themselves to workers at distribution depots for equal pay purposes. Find out more about this Employment Appeal Tribunal.

View blog

More protection required for retailer workers as violence is on the rise, according to latest statistics

Following an MP debate on 5 November 2019, the government is due to release long-awaited guidance as to how it intends to protect workers in the retail industry against violence, harassment and abuse.

View blog

Equal pay at ASDA Stores - comparing apples to oranges?

In one of the first group equal pay claims in the private sector, the Employment Tribunal has determined that over 7,000 ASDA store workers (predominantly female) are able to compare themselves to distribution workers (predominantly male).

View blog

Court of Appeal confirms holiday pay must take account of commission

The long awaited judgment from the Court of Appeal (CA) in the case of British Gas Trading Limited v Lock & ors has now been published.

View blog

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up