Read This If You Pay Commission To Your Staff
Stop Press! There’s Been a Judgment on the Case of Lock v British Gas
Do you pay commission to your staff? If you do, then please read on.
Lock v British Gas. What was the case about?
Mr Lock was employed as a British Gas Salesman. He therefore received commission for successful sales. This commission was on top of his basic pay. However, when he received holiday pay, this was based on his basic pay only.
Mr Lock put forward the argument that whilst he was on holiday, he could not generate commission, as he wasn’t working. His assertion was that his holiday pay should reflect the money he would have earned from commission had he worked and not been on holiday, therefore meaning that he would not lose out financially whilst on holiday.
In this case, the Employment Tribunal referred the matter to the Court of Justice of the European Union. They held that commission should be included in holiday pay, but how this should operate in practice, was referred back the Employment Tribunal.
The Employment Tribunal decided that holiday pay should be calculated according to Mr Lock’s normal working hours, at his average actual hourly rate of pay, which including commission, instead of just his basic pay.
The case was appealed to the Employment Appeal Tribunal.
So what has happened now?
We have today heard that the Employment Appeal Tribunal has decided that Mr Lock, is entitled to holiday pay which includes a portion for the amount of commission he would normally have received had he worked and not been on holiday.
This case may still be subject to further appeal. The Employment Appeal Tribunal shall publish their judgment later on this afternoon, so we’ll keep you posted.
What does it mean to you?
If employees are paid commission, you should ensure that their holiday pay reflects an element for the amount of commission they would ordinarily have received, had they been working.
If you have any questions, then Talk to Tollers. We’re here for you.