Holiday pay and commission – the latest instalment

Last year, in the case of Lock v British Gas Trading, the European Court of Justice  ruled that Mr Lock’s holiday pay must include commission because the commission Mr Lock earned was directly linked to his work and therefore formed part of his normal remuneration.

The case was referred back to Leicester Employment Tribunal, which has confirmed that the Working Time Regulations should be read so that commission payments are included in holiday pay calculations. The decision only applies to the four weeks minimum leave entitlement under European Law, however, and not the full 5.6 weeks minimum leave entitlement in the UK. This is unlikely to be the last word on the subject of holiday pay as this decision may be appealed, and it is still not clear what reference period employers should use for calculating commission payments in in these circumstances.

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