The Employment Appeal Tribunal has now confirmed that commission should be included when calculating an employee’s holiday pay.

In British Gas Trading Limited v Mr Z J Lock & Secretary of State for Business, Innovation and Skills, British Gas had appealed against the decision that commission should be paid as part of holiday pay. However, the Employment Appeal Tribunal confirmed last week that employers should pay regular commission as part of holiday pay. This ruling is in line with the earlier decision in Bear Scotland and others v Fulton and Others, in which it was decided that regular overtime should also be included in holiday pay.

In future this means that holiday pay should include regular commission and overtime payments. Failure to do so would amount to an unlawful deduction from wages. This is to ensure that people are not put off taking holiday because of they would lose out on valuable commission and overtime payments.

Employees are also able to claim up to a maximum of two years back pay for any past underpayments if there has not been a gap of more than 3 months less 1 day between holiday dates and pay.

This is an important ruling for employees as it means that time off is paid at a comparable rate to time at work.

If you are concerned about whether you are being paid correctly for your holiday pay, or if you have any other questions relating to your employment rights, then we can help. Here at Beecham Peacock we have a trusted relationship with some of the largest trade unions in the country to protect your working rights. For further information call us on 0191 232 3048 or email

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