Should holiday pay include commission?


As an employment law specialist, we deal with a high number of cases relating to wages and holiday pay. Some are straightforward, while others are much more complex. The recent case of holiday pay commission certainly falls into the latter.

Do you pay commission? If so, you might want to read on as you could soon be liable to paying staff commission as part of holiday pay.

In December 2015, the Employment Tribunal listened to the appeal of a former British Gas employee, who is claiming owed money because his holiday pay did not include average earnings from commission during the period he was away on holiday.

The employee is paid basic pay, yet tops this up with monthly commission based on sales. Consequently he felt that he was entitled to the average pay, and not the basic pay, when receiving holiday pay, but this was refused by his employee British Gas, despite the Working Time Directive indicating that commission should be considered when calculating holiday pay.

The tribunal has requested the European Court of Justice to provide clarification on the link between holiday pay and commission, yet it is likely to be mid 2016 before a definitive answer is provided, leaving many employers sweating on the potential cost in claims if the ruling should work against them.

For employers concerned about the impact of this case on their business, please get in touch with Avensure to book your free consultation to assess the risk to your business, plus ongoign support on all employment issues.

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