ECJ Ruling

26th February 2016

ECJ Ruling: Holiday pay must be calculated based on all elements of normal earnings.
A new case (British Gas v Lock) has confirmed that holiday pay calculations should take account of commission earnings as well as overtime.

Mr. Lock, a salesman for British Gas received a basic salary plus commission on a results based. The commission element of his pay amounted to approximately 60% of his overall pay. British Gas included only the basic pay element in any holiday pay and said that they were complying with English law in doing so and therefore in the periods following holiday the employee would receive less as they had not been working and therefore would not have earned any commission. The European Court of Justice confirmed that from a European Law perspective, the sort of commission that the employee was receiving should be included for holiday pay purposes. The Employment Tribunal confirmed that this should be the case as far as English law was concerned too but only for the first 20 days of holiday in each year.

Although legislation was passed to limit the potential for “back dated” claims for underpayment of holiday pay, employees who believe that they may be owed holiday pay can still submit their claims to the Employment Tribunal. If you require further information or would like to discuss this in more detail to see whether it affects you and your business, please contact us.

Blog entry by: Trina Nunn.



 
Other items in Blogs
 
Lisa Searle
8th January 2018 National Minimum Wage Rates

  Effective from April 2018 the National Minimum Wage rates will be increasing again, as per the below figures: Workers aged 25 years or more: £7.83 per hour Workers aged 21 to 24 years: £7.38 per hour Workers aged 18 to 20 years: £5.90 per hour Workers aged under 18 (but above compulsory school age):…

Read More »

Julie Quayle
8th January 2018 HMRC – Appeals

  HMRC has updated the postal address for where to send grounds for appeal if you have not paid your PAYE and National Insurance contributions on time. The address that should now be used is: DM PAYE Late Payment Penalties HM Revenue  and Customs BX9 1EW HMRC will charge penalties if more than one of…

Read More »

Jaimie Lane
4th January 2018 Charity annual returns due

  Charities with the financial year end of 31 March 2017 must submit their annual return by 31 January 2018, 10 months after the year end. What you need to submit varies based on whether it is an un-incorporated organisation or a charitable company. It also varies based on income of the charity – requiring…

Read More »

Richard Alecock
4th January 2018 Directors’ responsibilities

  Limited company directors and secretaries are collectively referred to as ‘officers’. Directors are appointed by members (shareholders and guarantors) to run and manage the day-to-day operations of the business. Secretaries are optional for private companies, but not public companies. They are usually appointed to assist directors with important administrative tasks. An Overview Company directors…

Read More »

Andrew Band
4th January 2018 EU competition infringements by European truck manufacturers

  The European Commission imposed fines of €3.4 billion in July 2016 and September 2017 following findings that a number of manufacturers were party to a cartel at senior management level from 1997-2001. Breakdowns of the fines for the companies involved were as follows: Daimler/Mercedes – €1 billion Scania – €880 million DAF – €752…

Read More »

Ian Piper
2nd January 2018 Compulsory Purchase Orders: Opportunity to tax efficiently diversify?

  With numerous businesses currently being forced to sell property under compulsory purchase orders (COP’s), a little known tax rule may be of assistance in enabling you to diversify your investment in your trade into a buy-let-investment without incurring any tax: HMRC guidance HS292 Business asset rollover relief is a long established rule which allows…

Read More »