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It pays to go on holiday!
Regular readers will know that there have been several cases taken to the European Court to decide how to calculate holiday pay and that at the end of last year they ruled that it should be calculated on the basis of "normal" pay so that if someone did regular overtime, this should be included in the average pay rate calculation for leave pay purposes. Another case relating to loss of ability to earn commission whilst on leave has recently been returned to the UK for consideration.

Another case, this time relating to loss of ability to earn commission whilst on leave has recently been returned to the UK for consideration. In this case (Lock vs British Gas) The Employment Tribunal was asked to consider whether the UK Regulations could allow for the findings of the CJEU. The Judge decided that such cases should be treated in the same way as an individual with a variable amount of pay and as such should be calculated in the same way (i.e. averaged over the 12 weeks prior to the leave being taken.)

This gives effect to the Judgment of the CJEU and reinforces the obligation on employers to include commission in their holiday pay calculations. Remember that this technically only applies to the first 4 weeks of leave in a year - not the full 5.6 weeks of the UK's statutory minimum.

It may yet be appealed, but employers are strongly advised to look at their pay policies when it comes to the payment of annual leave - particularly if you have commission-earning employees.
Posted on 19 Nov 2016


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