The Endless Debate Over Holiday Pay And Commission May End
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The Court of Appeal’s long-awaited decision on the case British Gas Trading v Lock on commission in holiday pay has been released. British Gas failed to overturn the decision of the Court of Justice of the European Union (CJEU). The court had held that not paying commission in holiday pay went against the principles of the working time directive.
What Are The Implications of This?
This means that workers whose pay regularly includes commission or similar payments should now have their holiday pay calculated in the same way as workers whose pay varies according to how much work they actually do.
However, the decision does not mean that all commission payments will have to be reflected in holiday pay. In the Lock case the commission scheme was straightforward and the employee was paid according to the outcome of his own work and it was also clear a loss was suffered when he took a holiday (things which are not necessarily so clear in all cases).
Which means that this situation still remains ambiguous as to how normal remuneration and the required reference period are to be calculated in other cases. Care will need to be taken to consider exactly what constitutes ‘normal remuneration’ and how and over which period it is to be measured.