Mr Locke had claimed that the commission he had earned should be taken into account when calculating his holiday pay so that he would not lose income by taking annual leave.
Following the ECJ’s decision last year, which we have reported extensively on in our previous updates, the Employment Tribunal has now held that Mr Locke’s holiday pay should include an element for his commission.
This will impact on all industries where commission makes up a large proportion of an employee’s income such as the building trade and sales. It will now cost businesses more in wages. This does however only apply to entitlements to annual leave under the Working Time Regulations and does not extend to any additional contractual leave that an employee is entitled to.
The Courts however have yet to establish how such additional elements of holiday should be calculated.