Last month in our article Employment Law, what to watch out for in 2016 we reported that British Gas had appealed to the Employment Appeal Tribunal (EAT) to seek to overturn the decision of the Employment Tribunal in Lock v British Gas Trading (2014) that holiday pay should include commission which the employee would have earned had he not been on holiday. The decision from the EAT has now been published and, perhaps not surprisingly, they have upheld the Tribunal’s decision that employees who are on holiday should be paid the commission they would have earned had they been at work.
The logic in this case does of course follow the reasoning as in the other long running holiday pay case, Bear Scotland v Fulton (2014), in which the EAT ruled that UK law must be interpreted in a way which conforms to European law by requiring employers to take into account non-guaranteed overtime payments when calculating holiday pay. It does seem likely that British Gas may well appeal against this decision to the Court of Appeal, but the trend does seem to be clear that holiday pay should reflect what the employee would have earned had they not been on holiday.
This is still a developing area of law, and questions such as what reference period to use in the calculations have not yet been answered by the courts. We will keep you updated on developments.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).