Holiday Pay Update

In October 2016, we reported that, subsequent to the Employment Appeal Tribunal (EAT) having dismissed the appeal of British Gas in the well-publicised ‘Lock’ holiday pay case, the subsequent appeal lodged by British Gas at the Court of Appeal had also been unsuccessful.

You may remember that the Court of Appeal had upheld the previous decisions of the EAT and Employment Tribunal, finding that Mr Lock’s holiday pay must include an element of the sales commission he normally earned while working.

These previous decisions had not been surprising and reinforced the line of authority that employees’ normal earnings must be maintained by the employer during periods of holiday, whether that be in relation to bonuses, commission, overtime or allowances.

We also reported at that time though, that the story of the Lock case may not have been over quite yet, as British Gas had sought leave to appeal to a higher authority, namely to the Supreme Court. However, it has just been announced that the application by British Gas for leave to appeal to the Supreme Court has been refused, which will at last bring clarity to the issue of calculation of holiday pay for employers across the UK (subject, of course, to any change that may come around as a result of Brexit).

We will provide detailed analysis of what this decision means for UK employers shortly, but in the meantime, if you require any assistance in relation to holiday pay issues, or any other employment law matters, please do not hesitate to contact us on 0141 331 5150.