Statutory Holiday Pay and Commission

The Court of Appeal has finally made a decision in the case of British Gas Trading Limited –v- Locke & Another. The Court of Appeal has held that statutory holiday pay must include an element of result based commission. This affects the four weeks annual leave provided under Regulation 13 of WTR. However, the decision does not add anything of major significance to the European Court of Justice’s decision two years ago other than confirming that employers need to ensure that workers receive an amount which reflects the commission they would have earned if they had been on holiday. This decision will have a serious financial impact in a number of industries who will now have to calculate the extra cost if they have not already taken steps to implement it following the European Court of Justice decision.

Sadly, there was also no further clarification given as to how the calculation for the extra pay should be carried out. Indications are however that most employers have adopted a twelve week period.

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