Lock and another v British Gas Trading

British Gas has been refused leave to appeal by the Supreme Court in the long anticipated case of Lock and another v British Gas Trading on the payment of commission during an employee’s holiday. 

 Mr Lock, a sales consultant with British Gas, claimed in an employment tribunal that he was owed money as his holiday pay did not reflect what he would have earned from results-based commission.

In October 2016, the Court of Appeal ruled that holiday pay must include compensation for any results-based commission that would ordinarily be earned by a worker.

The tribunal asked the European Court of Justice (ECJ) for clarification on whether or not it was a breach of the Working Time Directive (2003/88/EC) for the Working Time Regulations 1998 to limit the calculation of a week’s pay for annual leave to basic pay and to exclude commission.

The ECJ held that a worker’s commission payments must be included in the calculation of an employee’s holiday pay.

The case then returned to the UK courts, but the refusal for leave to appeal by the Supreme Court brings the legal case to a close.

This means that all employees who earn commission must see that reflected in their holiday pay.  Until now, many employees who earned commission lost out on their commission whenever they took a holiday.

All that remains now is for the employment tribunal to determine what compensation should be paid by British Gas to ensure that workers like Mr Lock are not disadvantaged by taking a holiday. This is likely to be done by averaging an employee’s pay over a given reference period.

The UK’s withdrawal from the European Union, following the 2016 referendum vote to leave; Brexit, could threaten this employee right.