The Employment Appeal Tribunal (EAT) is to hear a case regarding holiday pay from British Gas on 8 and 9 December.
The case of Lock v British Gas, which will be heard by the EAT in London, could bring employers a step closer to receiving some certainty over the position regarding commission and holiday pay, as well as result in some practical guidance regarding how to calculate holiday pay from the tribunal.
It could also raise questions regarding the interpretation of EU law in UK domestic legislation.
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The case will be heard after British Gas appealed an employment tribunal (ET) ruling in March found that commission must be included when employers calculate holiday pay.
The tribunal ruled that the Working Time Regulations should be read to ensure commission is brought into the calculation for holiday pay in line with the Working Time Directive.
British Gas appealed the decision on the basis that non-guaranteed overtime and commission are dealt with under separate provisions, so the ET incorrectly concluded that the previous Bear Scotland case on overtime impacted the outcome of the Lock case. And, even if Bear Scotland was applied correctly, British Gas will argue that the EAT in Bear Scotland incorrectly concluded that UK domestic legislation can be interpreted to give effect to EU law.
Hannah Robbins, employment partner at law firm DWF, said: “The Lock v British Gas decision could have a pivotal impact on future holiday pay claims.
“Not only will it deliver more certainty for UK employers, but it will take them a step closer to much-needed practice guidance on matters such as appropriate reference periods or how to quantify a claim.
“Without these parameter,s it will be difficult for businesses to assess the full impact the changes to holiday pay will bring and certainly most are adopting a wait-and-see approach to the issue of commission while this case takes its time through the courts.”