Travel agents stand to gain up to two years’ worth of holiday back pay after a long-awaited judgment was made to alter employment regulations.
The new rules, which come into force on July 1, mean holiday pay must reflect commission earnings if an employee’s pay normally includes commission – as is the case for many agents.
The judgment in the Lock v British Gas Trading Ltd case has been published as a subsection in the Working Time Regulations 1998, after the case was returned from the European Court of Justice for a decision.
The court left it to the UK employment tribunal to decide how the ruling should be applied.
The judgment follows a dispute on whether commission should form part of holiday pay, rather than basing it on an employee’s basic wage.
A law firm immediately warned employers in the travel industry to review current holiday pay and contracts of their staff.
Artington Legal consultant solicitor Ruth Renton said: “This is the most recent decision in a long line of holiday pay cases clarifying the calculation
of statutory holiday pay by employers.
“Ignorance is no longer an option for employers and employers now need to review their employees’ pay arrangements/contracts to take into account commission and other types of bonus payment, overtime and any other payments that are intrinsically linked to performance.”