The long running case to decide how to treat commission payments with regard to holiday pay, was concluded yesterday.
The case involved a British Gas employee, Mr Lock, a sales person who earned regular commission as part of his pay. When he went on holiday, he was only paid his basic salary and he challenged this decision using the the Working Time Regulations (WTR) and the European Working Time Directive (EWTD)
British Gas unsuccesfully appealed the decision and all businesses need to be aware that they must include regular commission payments when calculating statutory holiday pay.
Employees who earn commission as part of their normal remuneration should have the commission element of their pay included when calculating their statutory holiday pay. As this ruling applies to the statutory four weeks holiday per year, any further holiday entitlement would not be affected by this decision.
Commission schemes can be notoriously complicated and if you want specific advice regarding how to apply this ruling to your employees, please call us on 01543 308642