Holiday Pay
Commission is "in" says ruling 26 March 2015
The employment tribunal in Leicester has handed down its long-awaited decision in Lock v British Gas .
Daniel Barnett’s employment law bulletin summarises:
Mr Lock was a salesman on a basic salary with variable commission paid in arrears. Mr Lock's commission depended not on the time worked, but the outcome of that work, i.e. sales achieved. Mr Lock could not earn commission whilst on leave, and therefore would lose income by taking it. He brought a claim for his 'lost' holiday pay after taking leave in December 2011 to January 2012. Following the ECJ's decision last year, the employment tribunal has held that Mr Lock's holiday pay should include an element for his commission. It has done so by inserting new words into regulation 16(3) of the Working Time Regulations 1998 as follows:- "(e) as if, in the case of the entitlement under regulation 13, a worker with normal working hours whose remuneration includes commission or similar payment shall be deemed to have remuneration which varies with the amount of work done for the purpose of section 221."
This will impact on future holiday pay entitlement. The impact on back-claims is reduced by the two year cap on backdated claims which takes effect on 1 July 2015.
For those that require more information, book the CIPPs Holiday Pay and Leave training course.
Calculating holiday pay 10 April 2015
Due to recent court judgments the rules employers and workers follow to calculate holiday pay may need to be reviewed. Acas has updated their guidance to reflect the changes.
Acas has updated their holiday pay guidance to reflect recent court judgements and the resulting change to regulations.
The Government has introduced regulations to take effect from 1 July 2015 to limit and clarify the maximum amount of back-dated holiday pay that can be claimed.
Key points
Guaranteed and normal non-guaranteed overtime should be considered when calculating a worker's statutory holiday pay entitlement but there is currently no definitive case law that suggests voluntary overtime needs to be taken into account. Commission should be factored into statutory holiday pay calculations. Work-related travel may need to be factored into statutory holiday pay calculations. A worker's entitlement to holiday pay will continue to accrue during sick leave . There are different rules for calculating holiday pay depending on the working patterns involved. Workers must take their statutory paid annual leave allowance and can only be ' paid in lieu ' for this when their employment ends. CIPP comment The CIPP are running a new training course on holiday pay and leave which will give members up-to-date detail on the changes. Visit the CIPP website for dates and locations
Holiday pay: Lock decision appealed 11 May 2015
CIPP Policy News Journal
25/04/2016, Page 122 of 453
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