British Gas to appeal EAT ruling on holiday pay

Andrew Brown
Andrew Brown

An Employment Appeal Tribunal has ruled employees’ commission should be factored into holiday pay.

British Gas is to appeal the ruling brought by former employee Joe Lock who complained he only received basic pay when he took annual leave.

It could mean thousands of workers claiming holiday pay they have been denied.



Lucy Lindstrom, head of employment law at British Gas, said: “We have requested permission to appeal to the Court of Appeal so that there can be a definitive ruling on this issue.”

Andrew Brown, a partner in the employment and pensions unit at Anderson Strathern told our sister publication Scottish Legal News that the case offers “little guidance” on a number of issues.

He said: “Other than confirming that commission ‘or similar payment’ must be included when calculating holiday pay, it offers little guidance to address the numerous questions which remain for employers.

“What ‘or similar payment’ means is not clear. What period should be used when calculating the average is not always going to be clear. One of the most common questions: ‘must voluntary overtime be included?’ also did not feature in the case.”

He added: “Based on an earlier decision (in the case of Bear Scotland) an employee loses their right to claim historic back payments if there is a gap of three months between underpayments; there is much doubt regarding whether that is a correct analysis of the law but that was not addressed in the British Gas case and will need to be determined by a further appeal decision in due course.

“There are several thousand holiday pay claims currently sisted, many of which will remain sisted at least until any potential appeal in the British Gas case has concluded. It is expected that some of these claims will provide much needed clarity but that will require the cases to proceed through the appeal process for judgments to be reached which would be binding upon tribunals.”

Brodies partner Joan Cradden agreed that the outcome is not that much of an advance in the ongoing holiday pay saga.

She told SLN: “If anything it simply points to further appeals on the subject. British Gas were trying to run a difficult argument to the effect that the UK Working Time Regulations cannot be ‘construed’ in a way that allows them to fit with current EU law.

“The judge in the Bear Scotland case had concluded that they could. That argument was politely, but firmly rejected by the EAT but there are clear indicators in the decision that further appeal is likely or even necessary.”

“Some commentators are suggesting that the decision supports the view that in the long term the claimants will succeed with their arguments about inclusion of commission and overtime in holiday pay, but the decision itself is not a basis for giving specific advice about settling cases or changing pay structures.”

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