Commission is "in" says ruling
25 March 2015
The employment tribunal in Leicester has handed down its long-awaited decision in Lock v British Gas.
Daniel Barnett’s employment law bulletin summarises:
Mr Lock was a salesman on a basic salary with variable commission paid in arrears. Mr Lock's commission depended not on the time worked, but the outcome of that work, i.e. sales achieved. Mr Lock could not earn commission whilst on leave, and therefore would lose income by taking it. He brought a claim for his 'lost' holiday pay after taking leave in December 2011 to January 2012.
Following the ECJ's decision last year, the employment tribunal has held that Mr Lock's holiday pay should include an element for his commission. It has done so by inserting new words into regulation 16(3) of the Working Time Regulations 1998 as follows:-
"(e) as if, in the case of the entitlement under regulation 13, a worker with normal working hours whose remuneration includes commission or similar payment shall be deemed to have remuneration which varies with the amount of work done for the purpose of section 221."
This will impact on future holiday pay entitlement. The impact on back-claims is reduced by the two year cap on backdated claims which takes effect on 1 July 2015
For those that require more information, book the CIPPs Holiday Pay and Leave training course.