Holiday Pay: Full Lock Decision available

Courtesy of Daniel Barnett:

Can domestic legislation be interpreted in a way which conforms to EU law on holiday pay?

Yes, held the EAT in Lock v British Gas, upholding the submissions of UNISON legal who represented Mr Lock. Domestic legislation is contained in the Working Time Regulations 1998 (‘WTR’) and sections 221-224 of the Employment Rights Act 1996. European Union law is contained in Council Directive 2003/88/EC, the Working Time Directive.

The right to paid leave is a pillar of EU social law from which there can be no derogation.

Mr Lock was paid basic salary and results-based commission but only basic pay during leave. A reference was made to the CJEU. An employment tribunal held that results-based commission must be included when calculating holiday pay and that it was possible to read words into the WTR. British Gas appealed.

The EAT dismissed the appeal. It is permissible – and indeed necessary – to imply words into the WTR to comply with EU law. Parliament’s intention must have been to comply with EU law. Following Bear Scotland (concerning guaranteed overtime), the EAT saw no reason to depart from the reasoning of Langstaff J. The EAT considered a number of other authorities including the Court of Appeal decisions in Bamsey and Evans but concluded that Bear is correct. The EAT is not bound by its own previous decisions but they are persuasive and may only be departed from if manifestly wrong or in other exceptional circumstances. Such departure could not be justified.

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