Do you have staff who earn commission? If so the following case may apply to you
There has been a further judgment in the on-going litigation between British Gas and a number of its employees concerning unlawful deduction of wages due to miscalculated holiday pay.
In summary, Mr Lock was a salesman for British Gas and received a basic salary with variable results-based commission paid in arrears. However, he was only paid basic salary whilst on annual leave and the Leicester Employment Tribunal found that Mr Lock’s holiday pay should include an element for the commission that he would have earned had he not been on holiday and that words should be added to the domestic legislation in order that the calculation of a week’s pay conformed with EU law.
British Gas appealed against the latter part of this decision, arguing that the Tribunal had erred in concluding that the domestic legislation could be interpreted in a way which conforms with the Directive. In circumstances where the domestic legislation cannot be interpreted in a way which is compatible with EU law, then courts and tribunals in must give effect to the domestic legislation despite the incompatibility with EU law. British Gas attempted to persuade the EAT not to follow its previous decision in Bear Scotland v Fulton , where the appeal tribunal had re-cently decided that holiday pay calculations should include guaranteed overtime payments. The EAT could not find that there was any reason to depart from the decision in Bear Scotland and dismissed the appeal.