Mr Lock was employed by British Gas as a salesman and his remuneration package included his basic salary plus commission for customer sales.
When he took holiday he was paid his basic pay only and lost out on the chance to earn commission and brought a successful claim for unlawful deductions from wages which his employer appealed. The EAT has found that the Working Time Regulations can be interpreted in a way which conforms with EU law and hence that Mr Lock was entitled to holiday pay that included an element for the amount of commission he would normally receive when working.
This decision, subject to any further appeal in the matter, confirms the EAT’s earlier decision in the Bear Scotland case, which concerned the Working Time Regulations and the calculation of holiday pay, which in that case was in the context of non guaranteed overtime.
This will have a significant impact on holiday pay practices for employers who pay not only commission but also other payments to their staff, in addition to basic pay. We will be posting a more detailed update once we have reviewed the decision fully.