CJEU confirms holiday pay will include commission
The CJEU has formally confirmed the AG’s opinion that commission is part of the normal pay that an employee should receive whilst they are on annual leave.
This decision is in relation to the case of ZJR Lock v British Gas.
60% of the Claimant’s income was from commission. When he went on annual leave he was unable to gain commission, so his wages in the following weeks were drastically reduced to basic pay only.
The CJEU confirmed that the Working Time Directive is there to encourage employees to take annual leave. Any failure to pay an employee or failure to pay their normal pay is a deterrent to taking annual leave.
If the commission or other payments are earned by doing work that is intrinsically linked to an employee’s day-to-day tasks then the employee should be paid an amount reflective of this income during their annual leave.
The AG had recommended that to calculate the rate of commission to be paid whilst the employee was on annual leave, an average of the last 12 months commission should be used.
The CJEU has stated that it’s a matter for the UK Tribunals to determine what reference period is appropriate.
This affects all employers who pay employees commission or other payments in relation to their day-to-day responsibilities and currently pay basic pay only to their employees while they’re on annual leave.
Need advice? We can help you
Related articlesReturn to the insights archive »
The content on our site is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.