Holiday Pay: Advocate-General Opines Must Include Commission

Thanks to James Medhurst, Trainee Solicitor, of Slater & Gordon Lawyers for preparing this case summary

Should commission be taken into account when calculating holiday pay?

Yes, according to the opinion of Advocate-General Bot in the CJEU in ZJR Lock v British Gas.

The worker was a salesman whose pay consisted of two elements, basic pay and commission. His commission was based on sales achieved, and fluctuated from month to month. He was on annual leave for two weeks over Christmas 2011 and he was not able to make any sales during this period. When calculating his holiday pay, his employer took only his basic pay into account.

Applying Williams v British Airways, A-G Bot recommended the court find that, as commission is intrinsically linked to the performance of the tasks the worker is required to carry out under his contract of employment, it must necessarily be taken into account in calculating holiday pay. He also recommended that it should be left for national courts to decide on the mechanism for determining the appropriate amount of commission to include.

A-G Bot made his ruling having expressly considered the decision of the Court of Appeal in Evans v Malley Organisation, in which it was held that commission does not need to be taken into account when calculating holiday pay. If the Advocate-General's opinion is followed by the CJEU, which it normally is, it would appear that Evans should no longer be followed.