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Overtime and Commission. Know the holiday pay rules.

3rd October 2016 by Robin Watson

Categories: What's New?
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The Employment Appeal Tribunal (EAT) has ruled that commission payments must be included when calculating holiday pay.

British Gas was seeking to prevent their employee, Mr Lock, taking account of his significant results-based commission and instead only pay him his basic salary during his holiday leave. The EAT approved the decision made by the Employment Tribunal who first heard Mr Lock’s claim. This comes after another recent EAT decision which held that overtime must also be included in the holiday pay calculation.

So what does this mean for Employers?

Although a further appeal by British Gas is likely, for now the obligation remains in most circumstances when calculating holiday pay, to include commission. There is a statutory reference period used to calculate an average weeks’ pay, but it remains to be seen if that period will be reviewed.

It is anticipated that Employment Tribunals will deal with this on a case by case basis in light of the rulings already made by the EAT. It is understood that British Gas alone has hundreds of claims against it relating to this issue, therefore employers must be aware to the risks of not reflecting commission in the holiday pay calculation.

Nationally there could be 1000’s of employee claims relating to holiday pay on hold  until this ruling was made. The view of Robin Watson and Ella Gould, both specialist employment solicitors at Laceys, is that Employers must get professional advice.

“The fact remains that whenever overtime or commission forms part of the remuneration received by an Employee, the calculation of holiday pay needs to be considered very carefully. The law is complex and advice is important to avoid exposure to claims” said Robin Watson.

Robin and Ella are able to advise Employers and Employees on holiday pay issues and all areas of employment law.

Please contact them on 01202 755980 or email

Robin Watson

Partner — Employment and Immigration

Direct dial: 01202 755202


“Robin provided excellent and honest support during an incredibly difficult time. Robin's advice and knowledge were exceptional as was the compassion shown towards me throughout this process.”

Christine Stafford

Robin studied law at the University of Southampton before achieving Distinction in a postgraduate law diploma at Bournemouth University in 2011 and being awarded the Dorset Magistrates’ Association Excellence in Advocacy Award.

Robin qualified as a solicitor with Laceys in 2011, and is now one of Laceys partners, specialising in employment law advising employers, HR Directors and managers on all aspects of complex employment law and day-to-day HR issues.

In addition, Robin completed a demanding course and examination process and qualified as a Solicitor-Advocate early on in his career. This entitles Robin to appear in all civil courts and enhances the service he can provide to clients.

Robin is able to bring his previous experience in management outside of the law and also, understands the real demands and issues involved in HR. Robin takes responsibility for the HR of Laceys which includes circa. 100 employees and so has experienced what it is really like to deal with frontline HR issues and his clients genuinely benefit from that. It enables Robin to give practical and clear advice based on real experience, as well as utilising his legal knowledge and experience.

Robin has advised and represented a national hotel and restaurant group concerning multiple redundancies and general ongoing employment law/HR support and also recently advised and represented a financial services organisation in a High Court contractual dispute.

Robin has previously advised a local charity regarding potential pay claims and represented a senior charity executive.

As part of his service Robin likes to provide training to his clients and their HR teams.

Away from work Robin enjoys cycling, cooking and eating. Lately, Robin has (again) started sketching and is trying to convince himself that he has a talent!

To find out more about Robin becoming Partner and why he chose to specialise in Employment law click here;

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