Holiday Pay Update: British Gas’s Appeal Dismissed

Thomas Twitchett

The wait is finally over. Earlier this week, the Employment Appeal Tribunal (EAT) delivered its long-awaited judgment in the holiday pay case of Lock v British Gas, comprehensively dismissing British Gas’s appeal.

The EAT’s decision reaffirms that, as a matter of English law, employers must factor in commission and similar payments when calculating the holiday pay of workers with normal working hours.

Holiday pay – the factsholiday-pay

Readers may recall that Mr Lock, a former sales consultant for British Gas, brought a claim against his former employer for unlawful deduction of wages under the Working Time Regulations 1998. Mr Lock claimed that his holiday pay should have included not only base salary but an element in respect of the commission that he habitually earned as part of his job. Mr Lock drew on EU law in support of his case and argued that the holiday pay provisions of the Working Time Regulations should be read consistently with such EU law. A link to our previous discussion of the case can be found at Holiday pay re-visited – the break’s over.

The EAT, dismissing British Gas’s appeal, agreed that it could read in additional wording to the holiday pay provisions of the Working Time Regulations 1998 to make them consistent with the EU laws upon which Mr Lock relied. In reaching this conclusion, the EAT placed heavy reliance on the EAT’s previous decision in Bear Scotland v Fulton – a 2015 holiday pay case concerning non-guaranteed overtime.

Mr Justice Singh, delivering the judgment of the EAT, was clearly reluctant to depart from Bear Scotland for fear of creating conflicting decisions at the EAT-level. He concluded if Bear Scotland was wrongly decided, it was for the Court of Appeal to put this right, and not him.

Taking up this obvious invitation (and with 918 similar claims against it) we understand British Gas is now seeking permission to appeal to the Court of Appeal.

Perhaps not the last we have heard then of Lock v British Gas.

Comments published on Employment Talk do not necessarily reflect the views of Allen & Overy.

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