The Court of Appeal has handed down its decision in British Gas v Lock. This is a significant case on the calculation of holiday pay.
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 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. In 2014, the European Court of Justice held that, when calculating holiday pay, Member States must ensure that a worker taking leave is paid by reference to commission payments that the worker would have earned if at work.
The issue for the Court of Appeal was whether the UK Working Time Regulations 1998 can be interpreted as including holiday pay in respect of commission.
When calculating holiday pay, workers are entitled to be paid an amount which reflects the commission they would have earned if not on holiday. However the Court did not answer the question of how is this amount calculated.