Just when we thought we were almost settled on what is and is not included in the calculation of holiday pay, there has been another potential shake up in the holiday pay world.

You may remember at the end of March this year we were able to report, following the case of Lock v British Gas, that commission was definitely included when calculating holiday pay.  That meant that, following the Bear Scotland case of October 2014, both (non-voluntary) overtime and commission should be considered when calculating holiday pay, although a decision on how exactly to make those calculations was awaited.

Last week, British Gas appealed against the decision of earlier this year.  The appeal is focused on the legal basis that the Tribunal used to come to its decision in concluding that commission should be considered in calculating holiday pay.

What does it mean?

The British Gas case is focused on commission, meaning that there is a real possibility that the law on commission payments and holiday pay will change once more.   The appeal also calls into question the decision making in the Bear Scotland overtime case, meaning that, potentially, the position on overtime may too alter.

The Employment Appeal Tribunal will hear the appeal towards the end of 2015.  Unfortunately a Judgment at the end of this year will not necessarily mean the end of the matter; either party may appeal the Employment Appeal Tribunal’s decision to the Court of Appeal and ultimately the Supreme Court, or may attempt to refer the matter again to the Courts in Europe.

What should you do?

Unfortunately this appeal makes an already uncertain area of law more uncertain.  The appeal means that, certainly the position on commission payments, is now not settled and could alter. Employers should remain cautious about making any big statements or changes based on a legal position which could well change in the next 12 months, and should seek advice from our team of solicitors prior to making such statements or changes.  We have a number of options available to employers to help them delay any decision making (if necessary) until after the outcome of the appeal hearing, or to implement interim measures if changes are already underway.

If you would like further advice and guidance on this recent decision, please contact a member of the Employmentor Team for advice.

Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any particular circumstance.

« Return to News