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Advocate General - holiday pay should include commission - Lock v British Gas

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  • Advocate General - holiday pay should include commission - Lock v British Gas

    http://www.walkermorris.co.uk/advoca...rading-ltd-and

    Advocate General's opinion that holiday pay should include commission - Lock v British Gas Trading Ltd and others C-539/12

    The Advocate General (AG) has issued an opinion that holiday pay of workers whose pay is made up of a fixed element and a regular commission (e.g. sales staff) should comprise both basic pay and an amount that reflects average commission (by reference to commission earned over a previous representative period). This opinion is predicated on the fact that Article 7 of the Working Time Directive is intended to enable a worker to actually take their annual leave entitlement and not be worse off as a result. Workers should not be discouraged from taking their leave entitlement for financial reasons.

    Mr Lock was a sales consultant for British Gas who was paid a basic salary plus commission for sales made in the previous period. His commission equated to around 60 per cent of his total income. He was unable to make sales (and therefore generate commission) during his holiday and he therefore suffered a reduced income in the period following his return to work. He brought a tribunal claim for unpaid holiday pay which was stayed pending a referral to the ECJ to consider the question of whether holiday pay should include commission. The AG rejected British Gas's arguments that:
    • Mr Lock continued to receive commission already earned which fell due during his holiday period
    • The sales targets were set to take into account holiday periods
    • The rate of commission paid took into account the fact that workers could not earn commission during holiday periods.

    The AG considered previous European Court of Justice (ECJ) case law on this subject. Whilst his opinion is not binding on the ECJ, it will be influential when it comes to consider the case.
    Employers who operate commission structures need to consider how they currently calculate commission in respect of holiday periods and how this decision is likely to affect them. If the ECJ agrees with the AG opinion, workers may be in a position to bring retrospective unpaid wages claims and this could represent a huge cost and administrative burden for employers.
    [MENTION=26290]mariefab[/MENTION] & [MENTION=19071]teaboy2[/MENTION]
    Last edited by charitynjw; 26th February 2016, 04:13:AM.
    CAVEAT LECTOR

    This is only my opinion - "
    Opinions are made to be changed --or how is truth to be got at?" (Byron)

    You and I do not see things as they are. We see things as we are.
    Cohen, Herb

    There is danger when a man throws his tongue into high gear before he
    gets his brain a-going.
    Phelps, C. C.

    "They couldn't hit an elephant at this distance!"
    The last words of John Sedgwick
    Tags: None

  • #2
    Re: Advocate General - holiday pay should include commission - Lock v British Gas

    The ECJ agreed that comission should be included.

    http://curia.europa.eu/juris/documen...=1&cid=1146018

    Mr Lock's Employment Tribunal judgement reflected this.

    https://www.unison.org.uk/content/up...eJudgement.pdf

    British Gas appealed, and lost.

    http://www.bailii.org/cgi-bin/markup...method=boolean

    P.S. A new law was enacted to limit the amount of backpay that could be claimed.

    http://www.legislation.gov.uk/uksi/2.../contents/made

    Comment


    • #3
      Re: Advocate General - holiday pay should include commission - Lock v British Gas

      Originally posted by charitynjw View Post
      http://www.walkermorris.co.uk/advoca...rading-ltd-and

      Advocate General's opinion that holiday pay should include commission - Lock v British Gas Trading Ltd and others C-539/12

      The Advocate General (AG) has issued an opinion that holiday pay of workers whose pay is made up of a fixed element and a regular commission (e.g. sales staff) should comprise both basic pay and an amount that reflects average commission (by reference to commission earned over a previous representative period). This opinion is predicated on the fact that Article 7 of the Working Time Directive is intended to enable a worker to actually take their annual leave entitlement and not be worse off as a result. Workers should not be discouraged from taking their leave entitlement for financial reasons.

      Mr Lock was a sales consultant for British Gas who was paid a basic salary plus commission for sales made in the previous period. His commission equated to around 60 per cent of his total income. He was unable to make sales (and therefore generate commission) during his holiday and he therefore suffered a reduced income in the period following his return to work. He brought a tribunal claim for unpaid holiday pay which was stayed pending a referral to the ECJ to consider the question of whether holiday pay should include commission. The AG rejected British Gas's arguments that:
      • Mr Lock continued to receive commission already earned which fell due during his holiday period
      • The sales targets were set to take into account holiday periods
      • The rate of commission paid took into account the fact that workers could not earn commission during holiday periods.

      The AG considered previous European Court of Justice (ECJ) case law on this subject. Whilst his opinion is not binding on the ECJ, it will be influential when it comes to consider the case.
      Employers who operate commission structures need to consider how they currently calculate commission in respect of holiday periods and how this decision is likely to affect them. If the ECJ agrees with the AG opinion, workers may be in a position to bring retrospective unpaid wages claims and this could represent a huge cost and administrative burden for employers.
      @mariefab & @teaboy2
      EU law only covers persons in public jobs (ie local gov, civil serv. etc) unless it's a British Gas type one, or bailed out bank's employees etc.

      Comment


      • #4
        Re: Advocate General - holiday pay should include commission - Lock v British Gas

        Originally posted by Openlaw15 View Post
        EU law only covers persons in public jobs (ie local gov, civil serv. etc) unless it's a British Gas type one, or bailed out bank's employees etc.
        http://www.legislation.gov.uk/uksi/2.../contents/made

        http://www.legislation.gov.uk/uksi/2...0143322_en.pdf

        (Thanks to [MENTION=26290]mariefab[/MENTION] for this)
        CAVEAT LECTOR

        This is only my opinion - "
        Opinions are made to be changed --or how is truth to be got at?" (Byron)

        You and I do not see things as they are. We see things as we are.
        Cohen, Herb

        There is danger when a man throws his tongue into high gear before he
        gets his brain a-going.
        Phelps, C. C.

        "They couldn't hit an elephant at this distance!"
        The last words of John Sedgwick

        Comment


        • #5
          Re: Advocate General - holiday pay should include commission - Lock v British Gas

          I meant substantive EU like discrimination as per EU Treaties. EU law workers in those in public jobs could claim commission as part of holiday pay but non public workers seemingly will not benefit from the ECJ case, not unless UK Parliament makes a law to permit it.

          Comment


          • #6
            Re: Advocate General - holiday pay should include commission - Lock v British Gas

            Oops, I only posted the ECJ summary. Here's the full decision.

            http://curia.europa.eu/juris/documen...=1&cid=1173696

            Comment


            • #7
              Re: Advocate General - holiday pay should include commission - Lock v British Gas

              Originally posted by Openlaw15
              workers in those in public jobs could claim commission as part of holiday pay but non public workers seemingly will not benefit from the ECJ case, not unless UK Parliament makes a law to permit it.
              I'm afraid that is not correct. Every worker, regardless of whether they work in the public or private sector, will benefit.

              Comment

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