Newsflash: Holiday pay and overtime

holiday pay - deck chairWhat do we already know?

We updated you in our November Newsletter Case update (1): Holiday pay and news on the EAT’s very well publicised decision in Bear Scotland Ltd v Fulton and others, that holiday pay should be calculated to include non-guaranteed overtime.

This followed the ECJ’s decision in Lock v British Gas which held that EU law does require that payments additional to basic salary, such as commission, be included in the calculation for holiday pay.

In light of the ECJ’s and EAT’s above decisions, the case of Lock v British Gas was referred back to the Employment Tribunal to decide whether Mr Lock’s holiday pay should include an element for his commission. This would entail deciding whether the principle of EU law set out by the ECJ could be read into the UK’s Working Time Regulations 1998. If this was not possible then the Government would need to change the law to enable holiday pay claims against private sector employers.

What’s new?

The Tribunal has published its decision in the case of Lock v British Gas available here. The Tribunal held that it is possible to insert into the Working Time Regulations 1998 additional wording such that holiday pay should include an element for commission. Therefore Mr Lock’s claim succeeded.

This is another important decision in a complex area and we shall unpick its implications and practical consequences in our April Newsletter, so watch this space…