Lauren Bennett

+44 (0)1733 887689 lnbennett@greenwoodsgrm.co.uk

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Holiday pay and commission – an update

employmentlaw@work / 02 March 2017

ISSUE:

British Gas has had its application to appeal to the Supreme Court refused in the long-running holiday pay and commission case of British Gas v Lock.

Our last briefing on Lock from 10 October 2016 is here.

A reminder of the case to date:

  • Commission made up, on average, over 60% of Mr Lock’s take home pay.  Despite this, his holiday pay was based on his basic pay only.
  • Lock went to the European Court of Justice (“ECJ”) in 2014 where it was found Mr Lock’s commission should be included in his holiday pay.
  • Following this, the UK courts had to decide whether the Working Time Regulations 1998 (“WTR”) could be interpreted to give effect to the ECJ’s decision in Lock.  Both the Tribunal and the EAT found that it could.
  • British Gas appealed to the Court of Appeal (“CoA”). The CoA dismissed British Gas’ appeal and found that the WTR should be interpreted so that Mr Lock received commission in his holiday pay.

British Gas sought to appeal against the CoA’s decision.  We now know that this appeal will not be allowed to proceed.

KEY DATES:

The Supreme Court refused to give permission to appeal on Tuesday 28 February 2017.

IMPACT:

Whilst the CoA’s decision is still good law, as we reported in October, the CoA stressed that it should be confined to contractual results based commission schemes of the type that applied to Mr Lock.

Lock will now return to the ET to deal with following issues:

  • whether, under the terms of British Gas’ commission scheme, Mr Lock actually suffered any loss;
  • the correct reference period for calculating holiday pay; and
  • the compensation (if any) due to Mr Lock.

ACTION:

We will continue to update you on key developments as the Lock case continues in the ET.  In the meantime, employers should continue to review their own commission schemes in light of these most recent developments in holiday pay litigation.

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