Well it’s official – commission must be taken into account when calculating holiday pay, although we still now await more info on what this ruling by the tribunal means in practical terms – no guidance yet on HOW you actually need to calculate this.

But wait we hear you say – didn’t you already tell us that we had to do this? Well yes we did (and yes you did need to) but this is yet more evidence of how complicated things get when EU rulings and directives are involved!

Basically – the UK tribunal service heard a claim for commission to be included in holiday pay, they referred it to the European Court of Justice to clarify how the EU rules, which must be followed in the UK, applied in this case. The ECJ decided that if commission is a regular feature of normal pay then it must be taken into account when calculating holiday pay.

So at that point we knew you would have to do it and we advised starting ASAP to avoid the potential for back dated claims. However the ECJ then passed the case back to the UK tribunal to work out how to apply their ruling in the UK – the original tribunal case was passed back to the UK tribunal who heard it last month and they have now made their ruling.

So now we await the guidance on exactly how to do it but those of you who have already made changes can feel secure that you should have avoided any potential for backdated claims by breaking the chain of “underpayments”.


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