EAT Finds That Holiday Pay SHOULD Include Commission

Summary and implications

The Employment Appeal Tribunal ("EAT") has yesterday handed down its long awaited decision in British Gas' appeal in the case of British Gas Trading Limited v Lock [2015].

Background

Mr Lock worked for British Gas. Mr Lock earned commission on sales which represented around 60% of his pay. When he took holiday his commission payments in subsequent months were lower because he had been unable to generate sales whilst on holiday. Mr Lock complained to the Employment Tribunal that he had suffered an unlawful deduction from wages and argued that holiday pay should reflect the income that a worker would usually receive had he been working. The Employment Tribunal referred the case to the ECJ where it was held that commission payments must be taken into account when calculating holiday pay. The Employment Tribunal subsequently adopted the ECJ ruling.