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ARTICLE · 25 JUNE 2014

Hiking Up Holiday Pay?

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Retailers should be alert to the recent ruling in the ECJ that holiday pay must include a payment in respect of contractual sales-based commission.

United KingdomEmployment and HR
Fiona Rushforth
Fiona Rushforth

Retailers should be alert to the recent ruling in the ECJ that holiday pay must include a payment in respect of contractual sales-based commission rather than being based on basic salary alone.

The Case – Lock v British Gas Trading Ltd

Mr Lock is an energy salesman working for British Gas. His contractual commission based on completed sales represented about 60% of his monthly pay. When he was on annual leave he received basic salary and payments for commission he had earned in the previous period. However, he brought a case in the Tribunal claiming that, when calculating holiday pay, he should also be entitled to the commission payments he would have earned had he not taken annual leave. 

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