Monday, 22 February 2016

Breaking News Lock v British Gas 'Commission to be included as Holiday Pay'

Should commission and other payments be encompassed by the definition of 'Holiday Pay'?  A key defining factor has been the decision in Lock v British Gas, both in the ECJ and in the EAT decision, which determined that employers may include commission and other types of variable pay in holiday pay calculations but left open major practical points about how the calculation should work. The resultant legal uncertainty and fear of significant back pay claims has left many employers paralysed over how to address the issue, pending further clarification. British Gas appealed the decision which rumour has it is out today.

Firstly British Gas argues that previous cases dealing with overtime should be distinguished as commission needs to be dealt with in a different way. Second, more fundamentally they say that the changes dictated by ECJ case law are incompatible with local law, so that it is not possible to interpret the Working Time Regulations in a way which complies with European law.

It is unlikely however that there will be rafts of cases pursued by hungry lawyers for backpay as if it's necessary to introduce new legislation then any changes will only take effect going forward from the date the change was made.

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