HR Support for Business promised we would post an HR update when the Leicester Tribunal handed down its long awaited (but not unexpected) decision regarding Lock v British Gas on whether commission should form part of holiday pay. And the answer is yes.
The background surrounding this case was Mr Lock was a salesman for British Gas and he was paid a basic salary and variable commission payments. His commission payments depended not only the time he worked but the sales he had achieved. Therefore Mr Lock could not earn commission when not at work and on holiday leave so lost that portion of his potential income whilst on holiday. He brought a claim for this ‘lost holiday pay’ after taking holiday from December 2011 to January 2102.
Last year the European Court of justice held that Mr Lock’s holiday pay should include commission. Based on this the Working Time Regulations 16/(3) was amended to: “(e) as if, in the case of the entitlement under regulation 13, a worker with normal working hours whose remuneration includes commission or similar payment shall be deemed to have remuneration which varies with the amount of work done for the purpose of section 221.”
What does this mean?
It not only means people paid in a similar manner should have commission included in future holiday payments, it opens the doors to backdated claims.
If you have read this quarter’s HR Support for Business’s Employers Newsletter you will know the Government intends to restrict backdated claims to 2 years but this will only be effective from 1st July 2015.
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