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EAT upholds decision that commission should be included in holiday pay
22 February 2016

The Employment Appeal Tribunal (EAT) has today ruled that the Tribunal was right to rule that commission should be included when calculating holiday pay.

In the original case, Mr Lock earned commission on top of his basic salary but only his basic salary was taken into account when calculating his holiday pay. The Tribunal ruled that this was inconsistent with EU law and it decided that words should be read into the Working Time Regulations 1998 (WTR) so that variable commission payments should be included in the holiday calculation. British Gas appealed.

The EAT said it was right to read words into the WTR so that it complied with EU law and that it must have been Parliament’s intention to comply with EU law. Although the EAT is not bound to follow its previous decisions, it decided it was not justified to depart from the previous decision in the Bear Scotland case which dealt with incorporating guaranteed overtime payments into holiday pay.

This was a widely expected decision and the advice to employers must be to carry on with their plans to deal with the issue. Whilst different employers will have different views on what to do, there is no doubt that the topic has to be considered and addressed.

To hear more about this and other recent case law changes, please join us for our free webinar on Thursday 25 February 2016, 11-12.  The webinar is live and there is a listen again facility. To register for the webinar please go to our events page or email [email protected].

For more information about this case and how it might effect you, or to find out more about how the employment team can help you please contact Darren Smith on 0118 952 7112 or email [email protected].


Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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