The Employment Appeal Tribunal handed down its decision in British Gas v Lock at the end of February. British Gas had originally been ordered to include results-based commission pay when calculating overtime, based on another case, Bear Scotland v Fulton. British Gas appealed the decision on the basis that Bear Scotland (which was concerned with overtime rather than commission) had no bearing on their case, and that the tribunal was wrong to conclude that UK domestic legislation could be interpreted purposely to give effect to EU law.
On appeal, the Employment Appeal Tribunal decided that the original tribunal had been right to heed Bear Scotland and that commission payments should not be treated differently from overtime payments when calculating holiday pay. The EAT noted that if Bear Scotland was wrong, it was up to the Court of Appeal to decide.
Next steps: So what does this mean for employers?
If British Gas decides to appeal and the appeal is granted, then the uncertainty will continue at least until early 2017. If it decides not to appeal, then, as a result of the two Employment Appeal Tribunal decisions to date, there is sufficient certainty to recommend that employers (if they have not already done so) adjust their holiday pay calculations. To avoid running the risk of a future challenge, please contact a member of the team who can advise you on how to calculate holiday pay correctly.
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