Wragge Lawrence Graham & Co

UK 200 2013 position: 25

Earning commission while on holiday

By Martin Chitty

The Court of Justice of the European Union (CJEU) finds that if a worker is paid commission calculated on the basis of the sales that they make, that commission must also be included in the calculation of holiday pay.

Calculating the correct amount of holiday pay owed to a worker can prove to be a tricky task for an employer. In 2012, the CJEU and subsequent Supreme Court judgments in British Airways plc v Williams established that a worker must be no worse off financially during annual leave than if he/she had continued working. So, under EU law, workers are entitled to receive their ‘normal remuneration’ when taking statutory holiday leave. This includes not only basic salary but also remuneration ‘intrinsically linked to the performance of the tasks’.

Given this, Williams brought into question whether other types of workers could argue that certain commission payments or non-guaranteed overtime currently excluded from holiday pay form part of their ‘normal remuneration’. Has Williams opened another holiday pay floodgate? …

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