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Should you include commission when calculating holiday pay?
Yes, says the Advocate-General to the Court of Justice of the European Union.
The Court was hearing a claim by a Mr Lock, a salesman whose pay consisted of both basic pay and commission on sales. He was, naturally, unable to make any sales during his two weeks Christmas annual leave. When calculating his holiday pay, his employer took only his basic pay into account. The Advocate-General’s opinion was that, as commission was intrinsically linked to the performance of Mr Lock’s work, it must be taken into account in calculating his holiday pay. Merry Christmas Mr Lock!
Assuming the CJEU agrees with the A-G, it will be left for national courts to decide the mechanism for working out the appropriate amount of commission to include. The usual method in our country is to average it over the immediately preceding 12 weeks. That will make agreeing the times when salesmen can take their holidays a little more interesting.