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Commission as part of holiday pay – Tribunal judgment

Regular readers will recall the much publicised case of Lock v British Gas involving a salesman for British Gas who did not earn any commission during a period of holiday as he earned commission on the number of successful sales.

The case came before the ECJ who stated that holiday pay calculations should include commission that would have been earned if the employee had been at work, but the matter was referred back to the Tribunal to consider how this should be calculated.

The Leicester Tribunal has now confirmed, following the ECJ’s ruling last year, that commission should be included in calculating holiday pay and has amended the wording of regulation 16(3) of the Working Time Regulations to ensure “commission [and] similar payments” are included in the calculation of a week’s pay to which workers are entitled will on annual leave.

This change will impact holiday entitlement going forward and employers will now need to be alert to the fact that elements of both commission and overtime should be included in holiday pay for workers.

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