Are you holiday pay ready?

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Posted:
Mar 7 2016

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After almost four years of debate, the Employment Appeal Tribunal has confirmed that employers will have to include commission when calculating holiday pay.

So if your employees are paid anything other than an ordinary salary for standard working hours, ask yourself, are you holiday pay ready?

Holiday pay essential

The decision comes following the long-running case of Lock v British Gas Trading Ltd, which was first brought to the tribunals in spring 2012. As a British Gas salesperson, Mr Lock was paid a basic salary plus commission, but when on annual leave he was remunerated at the lower basic pay level.

He argued this gave him a disincentive to take time off. The tribunal case was therefore passed to the European Court of Justice (ECJ) who found that because the commission was directly linked to Mr Lock’s work, it should be taken into account for holiday pay calculations. Once back with the UK tribunals, they also ruled in favour of Mr Lock.

The recent EAT decision follows an appeal by British Gas, which was dismissed.  Trade union Unison has hailed this a “victory for workers and a victory towards fair pay in this country and beyond”. The outcome will also no doubt influence a number of other pending holiday pay cases throughout the UK.

Commenting on the news, Cascade’s HR manager Donna Larvin said:

Some organisations may have been dreading this outcome, but it must be acknowledged that employees must not be deterred from taking time out for the rest and recuperation that they need. The decision has been made, so the main focus now should be to ensure policies and processes are implemented to ensure compliance.

Mindful that this case was reaching its climax, Cascade recently prepared a white paper on the subject of best practice holiday pay calculations. You can obtain your free copy here:

Guidetoholidaypay

If you would like to speak to a member of the team regarding the support that HR and payroll software can provide, please call Cascade on 0113 255 4115 or email info@cascadehr.co.uk.


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