Holiday pay clarification

The Court of Appeal has handed down its judgement in British Gas Trading Ltd v Lock & another [2016] and upheld the Employment Appeal Tribunal’s earlier decision, confirming that workers who regularly receive results-based commission are entitled to have such sums taken into account when their holiday pay is calculated.

Employers should be mindful that this judgement is only in respect of the basic four weeks’ annual leave under the Working Time Regulations. It subsequently does not apply to the domestic right to an additional 1.6 weeks’ annual leave in the UK. It also does not apply to any other additional contractual leave in excess of this amount.

It is unclear if British Gas Trading Ltd will seek leave to appeal the decision to the Supreme Court. Therefore affected employers should ensure that they comply with the judgement and calculate a week’s pay using the worker’s average remuneration over the 12 weeks before the calculation date.

If you or your business require any further clarification on the above points then please contact the Slater Heelis employment team on 0161 672 1246