Court of Appeal confirms holiday pay ruling for workers

Thousands of employees whose wages are partly based on commission moved a step closer today (Friday) towards claiming holiday pay previously denied them thanks to a Court of Appeal ruling on a case originally brought by UNISON against British Gas.

The decision confirms that anyone whose pay includes an element of commission can no longer be paid less for periods of annual leave. From now on, the amount that employees get for their holiday must be based on both their basic pay and any commission they earn.

Commenting on the case UNISON general secretary Dave Prentis said: “It’s taken four years to get here and today’s ruling says that employees should have their commission taken into account for their holiday pay.

“Until now some employees who relied upon commission and overtime lost a significant amount of money. It’s only fair that workers should receive their normal pay, including their regular commission, whenever they take their annual leave.”

This case will have implications for employees who normally receive commission and are paid less than their normal income during periods of annual leave. This may not be the end of the story though, as British Gas has applied for permission to appeal the decision at the Supreme Court.

Notes to editors:
– The Court of Appeal decision confirms the employment appeal tribunal decision in British Gas Trading Limited v Mr Z J Lock & Secretary of State for Business, Innovation and Skills, handed down on 22 February 2016.
– The tribunal found that that the domestic legislation could be interpreted in a way that conforms to the requirements of Article 7 of the working time directive. It upheld the similar decision of Bear Scotland & Others v Fulton & Others [2015] ICR 221.
– Mr Lock was employed by British Gas as a salesman and was represented by UNISON. His remuneration package included basic salary plus commission that was based on the number and type of contracts he persuaded customers to enter into. However, when he took periods of annual leave he would be paid just his basic pay, with no payment for commission. This was significantly less than his normal pay and was a disincentive to take annual leave.
– UNISON is supporting his claim along with over 700 others that are currently lodged with an employment tribunal pending the outcome of Mr Lock’s case. Mr Lock first challenged this at an employment tribunal in April 2012. The case was referred to the European Court of Justice that ruled in his favour, and it was then referred back to the employment tribunal, which again found in favour of Mr Lock.
– British Gas was today unsuccessful in its appeal, granting another legal victory for Mr Lock and UNISON.

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