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Commission and Holiday Pay – Still up in the air

The question of how employers should calculate holiday pay has been a hot topic since last year and the conundrum looks set to continue.

In October 2014 the EAT held in the case of Fulton v Bear Scotland that employers should take account of non-guaranteed overtime payments when calculating holiday pay for the 4 weeks’ leave provided to workers by the Working Time Directive.

The Tribunal made a similar ruling in Lock v British Gas which held that commission payments should be taken in to consideration when calculating workers’ holiday pay.

Last week British Gas appealed this decision. The appeal is unlikely to be heard by the EAT until later this year and may impact on claims for payments other than commission (including non-guaranteed overtime).

Employers already facing claims for backdated holiday pay would be wise to request a continued stay in any active cases pending the EAT’s decision in this case. Those employers fortunate enough to not yet be involved in litigation should exercise caution before changing how they calculate holiday pay.

Please feel free to contact us on 0191 282 2880 for a no obligation chat or email us if you require further advice.

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