Holiday Pay Update

The Employment Appeal Tribunal issued its decision in the Lock v British Gas case at the end of February 2016.

The EAT, rejected British Gas’ appeal and confirmed that Mr Lock is entitled to holiday pay which includes an element for the amount of commission he would normally receive when working his regular hours. The Lock decision follows on from the EAT’s judgement in the  Bear Scotland case, which confirmed that all regular overtime, which employees are obliged to perform if requested by the employer, should be included for holiday pay purposes. However it is important to remember that this top up only needs to be paid for 20 days’ worth of annual leave per year.


Unfortunately, the Lock decision does not provide any further clarity on the reference period over which average earnings must be assessed in calculating holiday pay. Accordingly uncertainty remains over how to calculate claim for previous underpaid holiday and how it should be calculated going forward. British Gas has stated that it intends to appeal the EAT’s decision, so watch this space for future developments……