Decision in the case of British Gas v Lock handed down today

The Employment Appeal Tribunal has handed down its long awaited decision in British Gas Trading Limited v Mr Z J Lock & Secretary of State for Business, Innovation and Skills in favour of a British Gas employee who was claiming that his commission should continue to be paid when he is on holiday.

His remuneration package included a basic salary plus commission which was based on the number and type of contracts he persuaded customers to enter into. However, when he took periods of annual leave he was paid just his basic pay and no payment for commission. This was significantly less than his normal pay and he argued that it was a disincentive to take annual leave. Mr Lock first challenged this injustice in the Employment Tribunal in April 2012.

The decision now means definitively that employees whose pay is part commission-based must have both commission and basic pay included in their holiday pay. The case has implications for workers who normally receive commission and other similar payments and are paid less than their normal pay during periods of annual leave.

This case triggered many other claims, of which 700 are currently stayed in the Employment Tribunal pending the outcome of Mr Lock’s claim. The case was initially started in the Employment Tribunal and then referred to the Court of Justice of the European Union which ruled in favour of Mr Lock. The case was then referred back to the Employment Tribunal, which again ruled in favour of Mr Lock. British Gas has now been unsuccessful in its appeal to the Employment Appeal Tribunal, granting another legal victory for Mr Lock.

Unison, who supported this case have said that workers who rely on commission and overtime lose a significant amount of money when they take the annual leave. They have long argued that it is fair that workers receive their normal pay, including their regular commission, for periods of annual leave.

This means that any employer who reduces pay during periods of annual leave should rectify the way in which they calculate holiday pay and may also mean that the 700 cases sitting in employment tribunal are soon to be resolved.

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