Employers should include commission payments in holiday pay calculations, the Court of Appeal has held.
Dismissing British Gas’s appeal in British Gas Trading Ltd v Lock and another [2016] EWCA Civ 983, Sir Colin Rimer emphasised the limits of his judgment. He said the question concerning the court was that of “whether the holiday pay of an employee with statutorily defined ‘normal working hours’, whose remuneration does not vary with the amount of work done during such hours, should be calculated solely by reference to his basic pay; or include an element referable to the amount of the results-based commission he normally earned”.
Lock, a sales consultant with British Gas, claimed that his holiday pay should reflect what he would have earned from commission. The case was referred to the European Court of Justice, which ruled that commission is directly linked to the work carried out and so should be taken into account when calculating holiday pay.
Sir Colin referred in his judgment to discussion during the case about how the decision would apply to different situations, such as the “salaried banker who receives a single, large results-based annual bonus in, say, March”, or a worker who becomes entitled to commission only at a certain point in the year.
He said: “My response to questions such as these—and to others covering other situations—is that nothing in this judgment is intended to answer them.”
The decision could, however, open the gates to claims from more than 1,000 British Gas workers.
