The European Court previously ruled that holiday pay must correspond to a worker’s “normal remuneration”. Unfortunately, as the law doesn’t define what this means, it has been the subject of much case law in recent years.
In the latest ruling, the Employment Appeal Tribunal held that holiday pay should include results based commission but only to the four weeks statutory holiday provided under European law.
Following on from the ruling last year that holiday pay should include non-guaranteed overtime, this could make holiday pay more expensive for employers.
Confusion also remains about how to calculate it.
It is understood that both cases, relating to commission and overtime, are to be appealed, so the many thousands of cases currently lodged with tribunals will remain on hold.