CALCULATING HOLIDAY PAY

The appeal judgment in the case of British Gas Trading Ltd v Lock & Anor  UKEAT/0189/15/BA is now available.

Determining what constitutes a “week’s pay” for the purposes of calculating holiday pay is often straight forward but when you have payments such as non-guaranteed overtime earnings and sales commission the calculations can become rather more complex  (see http://practiceindex.co.uk/gp/blog/hr-human-resources/holiday-pay-for-gp-practices/).

Mr Lock was a British Gas salesman earning a basic salary plus a results-based commission, a “commission which was based on the number and type of contracts he persuaded customers to enter into”. His holiday pay included “basic salary and any commission which had been earned earlier but happened to be paid at that time”. Mr Lock said that this was contrary to S221 of the Employment Rights Act 1996 and regulation 16 of the Working Time Regulations 1998 (WTR), as amended.

The Employment Tribunal agreed that it was possible to interpret WTR to include that results-based commission payments and therefore these (in this case his sales commissions) must be included in holiday pay.

The Employment Appeal Tribunal has now agreed.

Practice Managers

You must properly determine each employee’s “week’s pay” when calculating holiday pay. This is not just a “basic” salary and you must consider all payments made to the employee before making a decision.

EMPLOYMENT TRIBUNAL – NEW RULES ABOUT POSTPONEMENTS

The government recognises that “workplace disputes are best resolved outside the formalities of an Employment Tribunal” but when this is not possible, they aim to “provide a more efficient Tribunal service”.

One particular area of concern relating to efficiency is the number of “unnecessary and short notice postponements”. In practice, this means parties expending resources preparing for Employment Tribunal (ET) hearings which are postponed at very short notice (often on the date of the hearing), meaning that the whole process takes longer and inevitably costs both parties a lot more.

Following a government consultation changes will now be made to the Small Business, Enterprise and Employment Act 2015 which will:

• “discourage Tribunal parties from applying for unnecessary postponements”
• “facilitate the speedier resolution of disputes”
• still protect parties “with a genuine need for a postponement” and to “safeguard the needs of vulnerable groups, such as the disabled and those with caring responsibilities”
• enable the judiciary to use its discretion to “ensure that access to justice is maintained”.

The changes are as follows:

(i) if a party has already had 2 previous postponements in the same case, then they will only be successfully granted another postponement in that case if there are “exceptional circumstances”.

(ii) an application for a postponement which is made less than seven days “before the date of the relevant hearing” (so including any application made on the day of the relevant hearing) will only be granted if there are “exceptional circumstances”.

(iii) where the ET does grant a late postponement (i.e. where the application is made less than seven days “before the date of the relevant hearing”) then they must consider whether to grant an order that the party who is granted the postponement must pay the other party’s costs relating to the postponement (a costs order).

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