Holiday pay to include commission according to the advocate-general

By Adele Hayfield

The rules surrounding the calculation of holiday pay are notoriously complex and have resulted in a number of claims before the Employment Tribunal. Given the advocate-general’s recent opinion, this situation is unlikely to change any time soon.

Under Regulation 16 of the Working Time Regulations 1998 (WTR), a worker is entitled to be paid during statutory annual leave at a rate of a week’s pay for each week of leave, calculated in accordance with sections 221–224 of the Employment Rights Act 1996. If the worker has normal working hours but his or her pay varies, he or she is entitled to holiday pay based on his or her average pay during those normal working hours over the previous 12 working weeks.

Until recently, only payments due under the employment contract for normal working hours were taken into account for these purposes. However, the Employment Tribunal in Neal v Freightliner Ltd ET/1315342/12 put that position in doubt, by deciding that holiday pay should take account of pay that is ‘intrinsically linked’ to the performance of tasks required to be carried out under the employment contract. Therefore, although Mr Neal’s contract only required him to work 35 hours a week, in reality he almost always worked overtime…

If you are registered and logged in to the site, click on the link below to read the rest of the Shoosmiths briefing. If not, please register or sign in with your details below.

Sign in or Register to continue reading this article

Sign in


It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer


Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.


Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.


Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Shoosmiths

View more briefings from Shoosmiths

Analysis from The Lawyer

  • Hester: declined bonus worth almost £1m

    Pay checks

    Compliance and corporate governance codes for large financial institutions will undoubtedly include provisions to regulate high pay in the future

  • high street 150

    Focus: Alternative business structures - Law and new order

    There’s more to the ABS model than attracting the man in the street and procuring external investment. Partners at the big corporate firms, take note…


2 Colmore Square
38 Colmore Circus Queensway
B4 6BJ

Turnover (£m): 92.98
No. of lawyers: 393