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TEAM News

Supreme Court have Refused British Gas Permission to Appeal Holiday Pay Decision

In British Gas Trading Ltd v Lock and another, the Court of Appeal upheld the Employment Appeal Tribunal's decision that results-based commission should be included in statutory holiday pay for the four weeks' statutory leave required under EU law.

In October 2016, British Gas sought permission to appeal to the Supreme Court against the Court of Appeal's ruling. On 28 February 2017 the Supreme Court refused British Gas permission to appeal. The Court of Appeal’s decision therefore stands and employers should include contractual commission determined with reference to sales achieved in workers’ holiday pay for the four weeks' statutory leave required under EU law.

The case is now due to go back to the Employment Tribunal to decide some remaining points, including the actual amount due to Mr Lock. This will hopefully provide some guidance on the appropriate reference period for calculating the commission element of a worker's statutory holiday pay.

For workers with normal working hours, holiday pay for the four weeks' statutory leave required under EU law should include:

  • Commission payments.
  • Incentive bonuses.
  • Overtime that workers are required to perform, regardless of whether it is guaranteed. Overtime premiums should be taken into account.
  • Payments that relate to the "personal and professional status" of workers, such as those based on seniority, length of service or professional qualifications.
  • Productivity/performance bonuses.
  • Shift allowances and premiums (additional rates for working particular shifts, such as "time and a half").
  • Standby payments and payments for emergency call-out duties.
  • Travel and other allowances that are treated as taxable remuneration.

This bulletin is for general guidance purposes only and should not be used for any other purpose.

Brabners is a Limited Liability Partnership