British Gas has appealed against the Employment Tribunal’s ruling in the Lock case where it was held that Mr Lock was entitled to receive holiday pay based on basic pay and commission earned in the 12 weeks prior to his first four weeks of holiday. Much of that decision relied upon the earlier EAT decision in Bear Scotland v Fulton which held that employers had to take into account non-guaranteed overtime when calculating holiday pay
The EAT is being asked to rule that its previous decision in Bear Scotland was incorrect when it found that the Working Time Regulations had to be interpreted to give effect to EU law, and that the tribunal were incorrect to find that the provisions on non-guaranteed overtime were equally applicable to commission and, potentially, other payments.
The outcome of the appeal will be keenly awaited. Many holiday pay claims may not in themselves involve large sums of money for individuals, but given the potential number of claimants even individual small claims become a much larger problem when workers claims are combined.
It seems that the previous ruling on the need to demonstrate that each alleged deduction was within three months of the earlier deduction is not being challenged. Employers also have the comfort that from 1 July 2015 claims for certain unlawful deductions including holiday pay are limited to a maximum of two years.
Employers should consider steps they propose to take and at least be aware of the potential financial consequences of not taking any action at this stage. The appeal is likely to be heard towards the end of 2015.
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.