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Holiday pay: Stop press

The question of what should be included in holiday pay is to be revisited by the Employment Appeal Tribunal. It has been reported that British Gas has lodged an appeal against the recent tribunal decision that commission payments should be included in holiday pay calculations.

Holiday pay: Where are we now?

Recent cases found that UK law should be interpreted in line with European law, meaning that holiday pay calculations (at least for the basic four weeks’ statutory leave) should include:

  • Commission payments (Lock v British Gas Trading Ltd); and
  • Non-guaranteed overtime (Bear Scotland v Fulton).

Our previous blog explains in detail where the law stands just now.

What is being appealed?

Eversheds, the law firm acting for British Gas, has indicated that British Gas has lodged an appeal asserting that UK law cannot be interpreted in such a way as to mean that commission and non-guaranteed overtime must be included in holiday pay.

What steps should we take?

The appeal is not likely to be heard until the end of this year, prolonging the uncertainty surrounding this issue.

There is no ‘one size fits all’ approach to the holiday pay issue. Calculations depend on a number of factors including whether you pay commission; how you structure your overtime and bonus arrangements; whether workers have normal working hours or not; and whether pay varies with the amount of work done or when it is done (e.g. some shift workers).

Please get in touch with your usual Brodies’ contact if you need advice or assistance, and particularly if you are considering changing the way in which you calculate holiday pay, or settling any actual or potential back pay claims.



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