Workers have a statutory entitlement to 5.6 weeks' leave a year, during which they are entitled to be paid their normal pay. Recent case law developments have changed what may be regarded as "normal" and employers must now consider whether or not overtime and commission should be included in holiday pay.
In British Gas Trading Ltd v Lock and another, the latest important holiday pay case, the Court of Appeal has confirmed that employers should include a worker's commission in the calculation of his or her holiday pay. The Court of Appeal upheld the employment tribunal decision and agreed with the Employment Appeal Tribunal that the Working Time Regulations 1998 can be interpreted to require employers to include a worker's commission in the calculation of his or her holiday pay.
... our most recent podcast on holiday pay, discussing the Court of Appeal hearing in Lock and summarising where employers stand on holiday pay calculations.
- When does overtime have to be included in holiday pay?
- How should an employer compute a week's pay in relation to an employee's holiday pay entitlement?
- What is the minimum statutory provision for paid holiday?
- Is an employee who is required to work on bank holidays entitled to extra pay?
- Does an employer have to pay holiday pay to its casual workers?
- How is holiday pay on termination of employment calculated?
- If an employee dies, must a payment in lieu of accrued annual leave be made to his or her estate?
- Can an employer deduct overpaid holiday pay from a final salary payment?
Employment law manual
Line manager briefings
Policies and documents
- British Gas Trading Ltd v Lock and another  EWCA 983 CA
- Lock and another v British Gas Trading Ltd (No.2)  IRLR 316 EAT
- Lock v British Gas Trading Ltd and another  IRLR 438 ET
- Lock v British Gas Trading Ltd  IRLR 648 ECJ
- Patterson v Castlereagh Borough Council
- Bear Scotland Ltd v Fulton and another; Hertel (UK) Ltd v Wood and others; Amec Group Ltd v Law and others EATS/0047/13, EAT/0160/14 & EAT/0161/14
- Williams and others v British Airways plc  IRLR 948 ECJ
- HM Revenue and Customs v Stringer and others sub nom Commissioners of Inland Revenue v Ainsworth and others  IRLR 677 HL
Audio and video
- Podcast 2: Holiday pay update
- Podcast 1: Holiday and holiday pay entitlement
- Webinar: Holiday pay, overtime and commission - making sense of annual leave
- Lock holiday pay case: Court of Appeal hearing set for July
- EAT hears Lock holiday pay case on inclusion of commission
- Paid annual leave: "nothing in principle" to prevent inclusion of voluntary overtime in holiday pay
- Backdating limit on holiday pay claims comes into effect