Landmark ruling over commission in holiday pay ‘could cost employers more’

Bournemouth Echo: INCREASE: Robin Watson, employment law specialist with Laceys Solicitors LLP in Bournemouth INCREASE: Robin Watson, employment law specialist with Laceys Solicitors LLP in Bournemouth

EMPLOYERS could have to spend more on holiday pay following a European legal ruling, a Bournemouth solicitor has warned.

The European Court of Justice ruled that sales staff whose pay included commission should be paid that commission while they were on holiday.

The case which went to Europe involved a British Gas salesman whose pay was made up of a basic salary plus a commission which was linked to sales and paid some time after those sales were made.

An Employment Tribunal considering the case referred several questions to the European Court of Justice. The court said that when variable sums were linked intrinsically to the performance of an individual, then those amounts must be taken into account when calculating holiday pay.

Robin Watson, employment law specialist with Laceys Solicitors LLP in Bournemouth, said: “If remuneration is made up of a basic salary and variable amounts which are linked intrinsically to the performance of the tasks of the individual, then the variable amounts must be taken into account when calculating holiday pay.

“Holiday pay has always been a thorny issue and specialist legal advice should be sought before making any changes. The current methods of calculation can be technical and confusing and professional guidance is recommended.

“It may be that employees will start to consider making claims for holiday pay that is owed and did not take into account commission and other payments. These claims could be substantial.”

Mr Watson said the idea way in which the employment tribunal involved deals with the ruling would be significant. But he said businesses could not ignore the thrust of recent court rulings on the subject.

More rulings are expected this summer concerning overtime and holiday pay.

Comments (6)

Please log in to enable comment sorting

12:30pm Wed 2 Jul 14

speedy231278 says...

Ridiculous! If you are not working by choice, you haven't got the opportunity to earn the commission, so how can you be compensated for it? What next, applying it to maternity/paternity leave and sick pay?
Ridiculous! If you are not working by choice, you haven't got the opportunity to earn the commission, so how can you be compensated for it? What next, applying it to maternity/paternity leave and sick pay? speedy231278
  • Score: 1

1:05pm Wed 2 Jul 14

muscliffman says...

For every action there is a reaction and it is of course from silly employment regulations just like this that the undesirable 'zero-hours' employment contracts arose - so nobody wins.

Good old EU/European court, never mind how or who is really disadvantaged by all their ill considered liberal/socialist driven interfering red tape, just pile on some more!
For every action there is a reaction and it is of course from silly employment regulations just like this that the undesirable 'zero-hours' employment contracts arose - so nobody wins. Good old EU/European court, never mind how or who is really disadvantaged by all their ill considered liberal/socialist driven interfering red tape, just pile on some more! muscliffman
  • Score: 1

1:37pm Wed 2 Jul 14

speedy231278 says...

Exactly! And they 'they' wonder why more businesses take their work out of Europe wherever possible....

Perhaps this will start to see an end in commission paid jobs?
Exactly! And they 'they' wonder why more businesses take their work out of Europe wherever possible.... Perhaps this will start to see an end in commission paid jobs? speedy231278
  • Score: 1

5:26pm Wed 2 Jul 14

BH-TO-EH says...

Why not just pay a decent wage to begin with. Too many companies pay the absolute minimum with "commission" on top.
Why not just pay a decent wage to begin with. Too many companies pay the absolute minimum with "commission" on top. BH-TO-EH
  • Score: 4

5:26pm Wed 2 Jul 14

BH-TO-EH says...

Why not just pay a decent wage to begin with. Too many companies pay the absolute minimum with "commission" on top.
Why not just pay a decent wage to begin with. Too many companies pay the absolute minimum with "commission" on top. BH-TO-EH
  • Score: 1

10:25pm Wed 2 Jul 14

Turtlebay says...

Just getting most employers to recognise the law change in 2009 which entitles ALL full time employees a guaranteed 28 working days holiday a year, is a bad enough struggle!

Most national employers refuse to comply with that law!
Just getting most employers to recognise the law change in 2009 which entitles ALL full time employees a guaranteed 28 working days holiday a year, is a bad enough struggle! Most national employers refuse to comply with that law! Turtlebay
  • Score: 2
Post a comment

Remember you are personally responsible for what you post on this site and must abide by our site terms. Do not post anything that is false, abusive or malicious. If you wish to complain, please use the ‘report this post’ link.

click2find

About cookies

We want you to enjoy your visit to our website. That's why we use cookies to enhance your experience. By staying on our website you agree to our use of cookies. Find out more about the cookies we use.

I agree