Happy holidays — European court suggests that holiday pay should include commission

Commission accounted, on average, for some 60 per cent of the monthly pay of the claimant in Lock v British Gas Trading Ltd, a sales consultant. He took three weeks’ annual leave at the end of 2011; during this time he did not earn any commission as he was not making any sales and, as a result, his salary in the months following was reduced. He did receive a commission payment while he was on holiday, but this was for sales he had made earlier in the year, which he would have received in any event, whether or not he had been on holiday.

He then decided to ask for, in effect, a ‘top-up’ to reflect later losses of commission, in the form of a claim for unpaid holiday pay. The employment tribunal referred the claim to the European court; the UK’s Working Time Regulations do not make it clear precisely what must be included in holiday pay in this sort of case and there has been a conflict between a UK Court of Appeal decision (suggesting that only basic pay should be taken into account) and a more recent European case about airline pilots’ holiday pay that had ruled that any pay ‘intrinsically linked’ to performance of the worker’s job must be included…

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