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Employment Law

Legal guidance - compliance - software

17 JUN 2016

British Gas Trading Limited v Lock and another UKEAT/0189/15/BA; (2016) EMPLR 021

British Gas Trading Limited v Lock and another UKEAT/0189/15/BA; (2016) EMPLR 021

Workers whose pay includes commission are entitled to have that commission taken into account when calculating holiday pay.

Mr Lock earned a basic salary plus commission for any contracts he persuaded customers to enter into. He took a few days’ holiday and was paid his basic salary plus the commission earned for previous contracts he had negotiated. While on holiday, he was unable to earn commission. He complained that his holiday pay should include an amount representing the lost opportunity to earn commission while on holiday.

The European Court of Justice had already ruled that the Working Time Directive required Mr Lock’s holiday pay to include an amount to reflect the lost opportunity to earn commission. When the case returned to the UK tribunals, the only remaining question was whether the UK’s Working Time Regulations could be interpreted in a way that complied with the Directive. If they could not, then the holiday pay would have to be calculated without commission. The EAT concluded that the Regulations could and should be interpreted in a way that complied with the Directive. Therefore holiday pay should include an amount to reflect the lost opportunity to earn commission while on holiday.

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