Statutory Holiday pay to include commission

Thursday 19th June 2014

Under the Working Time Regulations workers are entitled to receive pay during their statutory leave. In working out what rate of pay workers should be paid, this is calculated in accordance with the Employment Rights Act. For workers with fixed salaries this is easily calculated as their normal pay.

However it becomes more complicated where workers don’t have fixed hours of work or they receive other payments such as overtime and commission. The recent case of British Gas v Lock has dealt with the commission issue and there are two cases pending for a decision on the overtime issue.

The Lock case has now established that commission should be included when establishing what a weeks pay is for holiday pay purposes.

What is not clear, as yet, is what the reference period should be for establishing how much commission should be taken into account. It seems logical that it should follow the reference period already established under the WTR of 12 weeks where workers pay differs over time however the Advocate General has suggested it could be over 12 months.

This also may mean employees making historical claims for back pay of unpaid elements of holiday pay.

Author: Administrator

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