Is the Working Time Directive going to be the first big repeal post-Brexit? Is the landmark ruling on Holiday Pay set to last?
Share
ThePeopleAlchemist Edit: HR, Business and WTR
On 28 February 2017, the Supreme Court refused leave to appeal in the landmark case of “ Lock v British Gas” bringing the legal case to a close. This long-standing legal proceeding, which included representation at Employment Tribunal (ET) Employment Appeal Tribunal (EAT), Court of Appeal (CA) and European Court of Justice ( ECJ) now establishes that UK law must be interpreted in line with the EU Working Time Directive (WTD) and therefore the requirement for holiday pay is that ‘normal remuneration’, commission payments and compulsory overtime should be included in the calculation of holiday pay for the basic four weeks annual leave derived from the WTD. The WTR specify that annual leave may only be taken in the year it is due. Payments in lieu of untaken holiday are only permitted on termination. The appeal in "King v The Sash Window Workshop Ltd." case considers instead whether the backdated holiday is due if an employee is unable to take holiday for some reason. The Employment Tribunal will need to now determine what compensation should be paid by British Gas to ensure that workers like Mr Lock are not disadvantaged by taking a holiday (British Gas will have to compensate Mr Lock and approximately 1,000 other employees who have suffered similar losses, currently waiting for the results of this case). Potentially this could be done by averaging the pay over a given reference period which it will have to be determined. Assuming British Gas does not settle beforehand, the Tribunal may provide some very welcomed guidance on how exactly holiday pay should be calculated when employees receive a commission. So what are employers meant to do now?- Review their workforce and see if there are employees and workers that do not have commission payment and compulsory overtime included in their holiday pay;
- Review their workforce and see if there are workers who do not receive paid leave;
- Review the annual leave provisions in their terms with employee and workers;
- Ensure that contractual terms relating to pay for leave are sufficiently clear.