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Companies paying commission and overtime will need to review their holiday pay arrangements and possibly the way they pay commission.

Following a European Court of Justice decision and subsequent Employment Appeal Tribunal (EAT) decision in Lock vs British gas Trading, a case that was first heard in 2012, employers will have to pay commission as part of holiday pay. For more details of the case read on here:

Commission, guaranteed overtime and overtime where an employee may be required to work will have to be included in holiday pay. It will affect staff who normally receive commission and overtime and are paid less when on annual leave. The details of how payments should be calculated have not been decided yet.

British Gas have requested permission to appeal to the Court of Appeal so that there can be a definitive ruling on the issue so the case is likely to go to Appeal.

So what should you do in the meantime?

You can do nothing. You can get legal advice and change your commission and holiday pay structures. You can make financial provision for back pay. Your lawyers are sure to be providing their clients with a briefing soon – so read it and then decide.

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