Readers will have been following the case of Lock v British Gas from its early days through Employment Tribunal (ET) to the Court of Justice of the European Union (CJEU) and back again to the original tribunal.
The decision of the CJEU was appealed and the case was heard on 8/9 December 2015 with the judgement being handed down on 22 February.
At this point, it will help to remind ourselves of the facts of the case.
Mr Lock was employed by British Gas as a salesman on a salary of circa £13,500. His package also included commission which was based on the sales he made to British Gas clients. When he took a holiday he was only paid basic salary plus any commission he had already earned.
Since he was not working when he was on holiday, he could not earn any commission and so he complained to the Employment Tribunal that that method of calculating his holiday pay was contrary to the requirements of section 221 of the Employment Rights Act 1996 and regulation 16 of the Working Time Regulations.
His claim at the Tribunal was that domestic legislation should be interpreted in a way which conformed to the requirements of Article 7 of the European Union's Working Time Directive. A previous reference to the CJEU, which held that Article 7 of the Directive requires
A previous reference to the CJEU, which held that Article 7 of the Directive requires results-based commission to- be taken into account when calculating an employee's holiday pay. The Employment Tribunal in the Lock case then held that it was possible to interpret the domestic legislation in a way which conforms to the requirements of the Directive by reading words into regulation 16. It was because of this that British Gas appealed.
The appeal was dismissed with the ruling being given on 22 February 2016.
The Employment Appeal Tribunal had recently decided that the domestic legislation can be interpreted in a way which conforms to the requirements of the Directive. The specific case in point is Bear Scotland and others v Fulton & others (2015). This case was specifically about overtime payments.
The general principle is that, although the Appeal Tribunal is not bound by its own decisions, they are of persuasive authority and it will follow them with certain exceptions, where:
A relevant provision in legislation was not considered in the previous case, or There are two or more inconsistent decisions of the Appeal Tribunal There are inconsistent decisions of the Appeal Tribunal and another court or tribunal on the same point, at least where they are of co-ordinate jurisdiction, for example, the High Court; An earlier decision is manifestly wrong; There are other exceptional circumstances.The ruling explained that:
The first three of those exceptions were not relevant in the present case. Despite the submissions made on behalf of British Gas, the decision in Bear Scotland was not manifestly wrong, and There were no exceptional circumstances such as to justify a departure from that decision in this case.Does this decision help us in making decisions at the coal face?
This was an eagerly awaited ruling and employers were hoping this would clarify the many outstanding issues. Has it?
We still have issues with the 12 week period used to calculate average weekly earnings under s221 of the Employment Rights Act 1996 The Working Time Regulations are still not fit for purpose in respect of carrying forward holiday There are still issues regarding voluntary v required overtimeWe will be following up these issues over the coming week.
You can view our webinar covering the development of the holiday pay changes here.
