Mr Lock’s success in arguing that his holiday pay should include his commission element has scared the wits out of employers.
British Gas however has appealed and the case was in the Employment Appeal tribunal last month. We wait with baited breath for the outcome……
Recap
You might remember that Mr Lock claimed that he was owed money by British Gas because his holiday pay did not reflect what he could have earned from commission. The tribunal paused for thought and referred the question to the ECJ for clarification on the relationship between commission and holiday pay.
The ECJ concluded that as the commission is directly linked to the work carried out, that it would be contrary to the Working Time Directive for that commission not to be considered when calculating holiday pay. The ECJ referred the case back to the tribunal to apply its ruling to UK law.
The Employment Tribunal did what tribunals have done recently and added wording into the domestic law (the Working Time Regulations) to give effect to the European Directive. In doing so, they took comfort from a decision at the similar time (Bear Scotland) that ruled that non-guaranteed overtime should also be included in the calculation of holiday pay. Mr Lock was therefore awarded his money.
I am sure that other employers are delighted that British Gas decided to appeal the decision on the basis that commission and non-guaranteed overtime are dealt with by different provisions and use differing language, and therefore the tribunal were incorrect in finding that Bear Scotland should have any impact on the outcome of the Lock case. They also appealed the conclusion that the domestic law can be interpreted purposely to give effect to EU law.
But what will this actually mean?
If British Gas loses, then get your calculators out and start working out the holiday pay. Take comfort however that the Government slammed the door shut on windfalls by introducing regulations to limit back pay claims to 2 years.
If British Gas wins, then what? It may well mean that the Working Time Regs still do not properly implement the European Directive so that would then have to be sorted out. What a minefield….
Watch this space and we’ll keep you updated.
