You will no doubt be aware of the on-going holiday pay saga the Tribunals have been grappling with for over 18 months now.
The one area that remained outstanding, was that of whether commission payments should be included in the calculation for holiday pay.
What is new?
The Employment Appeal Tribunal (EAT) has now announced its decision in the Lock v British Gas case which deals with just that point.
The EAT has agreed with Mr Lock that his holiday pay SHOULD include the commission that he would receive normally if he were working and not on holiday.
This is not a surprise and follows the trend that the other holiday pay cases set which was including more payments in holiday pay calculations. So commission joins the ever-growing list of elements of pay that should be included in holiday pay calculations.
What this means is that if your employees receive any element of commission in their pay it is possible that you may have to include an element in their holiday pay to account for this. It would need to meet the usual test of being:
- Intrinsically linked to the job they preform; and
- Paid with sufficient regularity.
Click here to read my recent articles about those principles in more detail.
What does this mean for me?
As with any Tribunal decision, this is not new law. The EAT has decided that the existing law can, and should, be interpreted in this way and commission should, and always should have, been included in the holiday pay calculation. As we know, this may mean liability for back pay for some employers.
If you are interested in the full decision it can be found on the EATl website from 4pm on 22 February 2016 at http://www.employmentappeals.gov.uk/public/recentjudgments.asp.
Alternatively, Flint Bishop is hosting a number of Employment Law Seminars which will be covering a number of employment related topics and legal updates, including holiday pay. For more information, please contact a member of the team who will update you on the current training dates.
If the dates are not available, we can also offer in-house bespoke training for any of the topics covered in our events calendar.
If you have any questions or queries in relation to holiday pay or any other element of employment law or HR please do contact me or one of the team at firstname.lastname@example.org or 01332 227595.