The recent decisions in relation to the correction calculation of holiday pay for employees that work overtime and receive additional payments such as commission have caused employers significant headaches. The British Gas case looked at the issue of commission, deciding that commission payments should be taken into account when calculating holiday pay when the payments are intrinsically linked to the employee's work, for example commission based on sales targets. In addition to the cost implication for employers, the decision raised questions as to how holiday pay should be calculated to encapsulate commission.
We reported in our last update in July 2015 (see http://www.coffinmew.co.uk/news.asp?info=Overtime+Commission+and+Holiday+Pay+Update) that the British Gas decision was subject to appeal and therefore things might change again. This week sees the case heading back to the courts for a decision to be made. We'll report further on the outcome of the appeal, which may still be some time coming, once this is published.
The issue of whether holiday pay should be bumped up to include additional benefits to go towards commission payments goes to an employment tribunal this week.