ZJR Lock v British Gas
In the above case the Advocate-General in the Court of Justice in the European Union has again confirmed that commission payments should be taken into account when calculating holiday pay.
The worker was a salesman whose pay consisted of two elements, basic pay and commission. His commission fluctuated from month to month. He was on annual leave for two weeks over Christmas 2011 and was not able to make any sales during this period. When calculating his holiday pay, British Gas took only his basic pay into account.
The Attorney-General recommended the court find that commission be taken into account in calculating holiday pay. He also recommended that it should be left for national courts to decide on the mechanism for determining the appropriate amount of commission to include.
In Practice
Paul Burton Employment Associate says “We have had several cases recently that are impacted by this case, with clients asking whether they have to take variable payments, such as commission and overtime, into account for holiday pay. Following this case and the earlier British Airways one we advise a cautious approach and consider taking the average pay, including the variable payments, over the previous 12 weeks before the holiday is taken.”
At Frettens, all of our solicitors offer a free initial meeting to chat on the phone to answer your questions. If this article raises issues for you or your business, please call us on 01202 499255 and Kate or Paul will be happy to discuss it with you.
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