UK: Tribunal confirms that UK regulations can be read as requiring commission to be reflected in statutory holiday pay

Readers will be familiar with recent EU and UK caselaw ruling that the UK Working Time Regulations fail to properly implement EU law, which requires workers to receive their full 'normal remuneration' when taking the 4 week EU-derived statutory holiday entitlement. 

In November last year the EAT ruled that the regulations should be read as if they provided for payments for regular, non-guaranteed (but compulsory if offered) overtime to be taken into account when calculating holiday pay for the 4 week entitlement (Bear Scotland v Fulton).  The employment tribunal in Lock v British Gas Trading has now confirmed that, similarly, words can be written into the regulations to provide that commission (or any 'similar payment') should be reflected in the calculation of pay for this holiday entitlement. 

The tribunal adopted the EAT's approach in Bear Scotland, ruling that it was possible to read words in to conform the regulations with EU law without going against the grain of the domestic rules.  The additional words proposed by the tribunal deem workers with normal working hours who receive commission 'or similar payments' to be workers whose remuneration varies with the amount of work done; as such, the provisions averaging pay over the previous 12 weeks will apply when calculating the 4 week holiday pay entitlement.

This ruling is not surprising given Bear Scotland; frustratingly, the more interesting issues (of whether a 12 week reference period for averaging pay is 'representative' as required by EU law and how the claim should be quantified) have been left to be covered in a further judgment in due course.