Lock v British Gas Trading: The Case That Could Change Holiday Pay

The recent tribunal case of Lock v British Gas Trading involved British Gas employee Mr Lock appealing a 2014 ECJ decision that denied his commission payments to be part of his holiday pay. Mr Lock’s successful reversal of the ECJ ruling may have significant changes to the entire UK legislation of whether commission should count as holiday pay for employees of all industry sectors.

Mr Lock’s legal team evoked the Working Time Regulations 1998 to argue that his overall holiday pay should consist of his basic salary along with additional sums that represent the likely volume of commission he would have generated during this period of leave had he of been working.

The appeal was successful and the money was awarded to Mr Lock in May 2015. However, British Gas has appealed the decision on grounds that guaranteed overtime should never be granted as part of holiday pay.

The British Gas legal team claimed: “After considering the decision of the tribunal very carefully, we decided to appeal against it […] we continue to talk to the trade unions about how best to approach holiday pay in the future.”

Should the appeal prove successful at tribunal next year it could result in a major change to UK employment law that would see UK law stand in contrast to the rules of EU legislation. If so, the UK government will be under immense expectation to make permanent changes to its current pay laws for all cases.

But before such changes can be implemented there are several other legal qualms to consider, such as whether forms of additional payment like bonuses and voluntary overtime should also be taken into consideration when judging holiday pay. A required reference period for calculating these payments will also need to be set.

However, if the Employment Appeal Tribunal (EAT) rules in favour of British Gas this can be considered further confirmation that EU regulation simply does not reflect British law and that new legislation needs introducing. Any new ruling on commission pay will only be allowed to take into account cases that are launched from the date of the law change. Cases already facing tribunal or that have been recently dismissed will not be catered for under this new law but could be eligible for review at a later date.

Should British Gas’s appeal be unsuccessful, the EAT ruling will remain in favour of Mr Lock and a second tribunal will also be required in order to determine how to compensate him and take into account how long the referencing period of his case should be.

Furthermore, if the appeal is rejected there will likely be a large number of other employees coming forward to voice similar concerns, which may begin legal measures that could take years to be completely heard.