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Lock v British Gas
The Employment Appeal Tribunal (‘EAT’) has held in this case that domestic legislation can be interpreted in a way which conforms to EU law on holiday pay. The EAT upheld the submissions by Unison, who represented Mr Lock.
Domestic legislation is contained in the Working Time Regulations 1998 ('WTR') and parts of the Employment Rights Act 1996. European Union law is contained in the Working Time Directive.
Mr Lock was paid basic salary and results-based commission but only basic pay during leave. A reference was made to the Court of Justice of the European Union. An employment tribunal had held that results-based commission must be included when calculating holiday pay and that it was possible to read words into the WTR. British Gas appealed.
The EAT dismissed the appeal. It is permissible and indeed necessary to imply words into the WTR to comply with EU law. Parliament's intention must have been to comply with EU law. Following the case of Bear v Scotland, concerning guaranteed overtime, the EAT saw no reason to depart from the reasoning in that case. Therefore, Mr Lock’s results-based commission has to be included when calculating his holiday pay.
In Practice
"This decision, which was delivered at the end of February 2015, is no surprise. Most commentators, including us, believed the EAT would follow Bear v Scotland and, more importantly, EU law. The EAT did consider a number of other authorities, but concluded that Bear is correct," explains Employment Associate Paul Burton. The EAT is not bound by its own previous decisions but they are persuasive and may only be departed from if manifestly wrong or in other exceptional circumstances. Such departure could not be justified in this case.
At Frettens, all of our solicitors offer a free initial meeting or 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.
