Jo Keddie, head of employment law at Winckworth Sherwood, has been quoted by Bloomberg in relation to a European court judgment in the case of Lock v British Gas Trading. She has described it as an ‘important judgment for all UK employers who reward their workers through a combination of
salary and commission payments’. She has also been quoted in the Irish Examiner.
The EU Court of Justice has ruled that when calculating statutory holiday pay for their employees, UK employers may well now need to take into account not just their basic pay but also the commission they would have earned during the period of their holiday.
Keddie said that the ruling is ‘likely to have an impact on a wide range of sales- and commission-based industries including banking and insurance, as well as recruitment and estate agents, where commission is often paid on the amount of sales or trades achieved over monthly periods’.
Essentially, she said, the employers who will be exposed will be those where commission is ‘intrinsically linked’ to the employee’s actual work and performance of his or her tasks (as opposed to a scheme that is based on a team or firm effort).
She added: ‘There is a real prospect that in such cases commission will now be reviewed over a rolling period [or a reference period as such] in order to consider how much an employee would have received during their holiday period in order to calculate their holiday pay.’