Earlier this month the long awaited judgment in Lock v British Gas was handed down. The headline outcome is that the court upheld the decision of the Employment Tribunal and Employment Appeal Tribunal, confirming that amounts earned from ‘results based’ commission should be reflected in holiday pay.
In some ways the result is not particularly surprising; after all two tribunals had already reached the same conclusion on what seemed to be sensible grounds. What is more surprising is that, despite the Court of Appeal’s decision, employers still face considerable uncertainty about how to practically address these issues.
It had been hoped that the Court of Appeal might have, for example, given some guidance about what reference period should be used for calculating what an employee’s average remuneration (including commission) actually is. However it declined to do so, leaving that type of detail to be determined on a case by case basis.
It seems that more litigation will be required to fill in the gaps, and Lock may even yet go to the Supreme Court. However, if employers do not wish to become the unwitting guinea pigs in this process they should be giving very careful thought to these issues now.
All that said, there has been another intervention since the Employment Appeal Tribunal made its decision which may prove to be even more decisive: the UK’s vote to leave the EU. Mr Lock’s claim relies on the UK’s obligation as a member of the EU to give effect to EU law, and specifically the obligation of courts in the UK to read UK legislation in a manner consistent with EU legislation wherever possible. If that obligation were no longer there Mr Lock’s claim and any others like it would be defeated at a stroke.
Of course it remains to be seen what Brexit will actually look like, so watch this space.