Holiday pay case law

Publication: CIPD HR Inform

The holiday pay legal saga looks set to continue for the foreseeable future. But in the meantime, employers need to be looking at pay systems in preparation for mandatory gender pay reporting, and the struggling retail sector gets some help with trading hours…

The Employment Appeal Tribunal (EAT) has rejected an appeal on the case, British Gas Trading v Lock, holding that commission payments should be included in the calculation of holiday pay. The key question was whether the previous employment tribunal was right to insert wording into the Working Time Regulations 1998 (WTR) requiring commission and similar payments to be included in holiday pay calculations following an earlier EAT decision in Bear Scotland v Fulton that employers should include overtime in holiday pay. The EAT took the view that it was for a higher court to decide if the ruling on Bear Scotland was wrong…

Keely Rushmore, an associate in the employment team at SA Law, said “employers hoping for some clarity and practical guidance will be left disappointed as there are still numerous wrinkles to iron out with regard to how the law should be applied in practice. Employers are still none the wiser as to what reference period they should use to calculate holiday pay. The cases are very much concerned with legal technicalities and less about how employers are to put the law into practice. Employers with pending claims will still be on tenterhooks waiting for more definitive guidance from the courts.”

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