Many Devon businesses could be forced to pay thousands of pounds in backdated commission to their employees following a ruling by European judges, an Exeter lawyer has warned.
The landmark ruling comes after British Gas salesman Mr Lock took his employer to an employment tribunal, claiming his commission should be paid on top of his basic salary while he was on annual leave.
The Court of Justice of the European Union ruled in Mr Lock's favour last month, saying the Working Time Directive, under which all EU holiday pay is governed, allows for employees to keep receiving their work-related benefits while on holiday.
Catherine Rosewell, litigation partner at Veitch Penny LLP, said: "Any employee who is paid a basic salary but receives additional income from commission could potentially now be eligible to claim for back dated payments."
She added: "There are many businesses across Devon that employ staff on some form of commission basis so the impact of this ruling on the county could be huge. The ruling doesn't just stop at commission; it could also apply to other additional payments such as bonuses and overtime."
This case will now go back to the employment tribunal to determine what annual leave payments Mr Lock is entitled to under UK law. It is likely that UK legislation will be amended to reflect this ruling so that an element of commission (averaged from previous months) will be included in holiday pay.
