We have previously reported on a number of cases that have considered how holiday pay should be calculated – the key issue is whether holiday pay should include all remuneration associated with employment (such as overtime and commission) or simply be based on basic pay. However, despite a number of recent judgments, the law has continued to remain unclear.
In the recent case of Lock v British Gas Trading Ltd, an employment tribunal has decided that the Working Time Regulations 1998 should be interpreted so as to include commission payments in the calculation of holiday pay in respect of the four weeks' holiday entitlement under the Working Time Directive. However, the tribunal did not decide how to quantify a claim for the commission element of holiday pay or the relevant reference period - this is to be dealt with at a later date.
Following this judgment, the position in UK law regarding the calculation of holiday pay remains unclear and there is still a lack of certainty for employers.
Click here to read my previous article published November 2014 'New judgment: Holiday pay must now include overtime payments'.
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