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The EAT has dismissed British Gas’ appeal against an Employment Tribunal decision that the Working Time Regulations 1998 should be interpreted so as to conform with the requirements of EU law to include Results Base Commission in statutory holiday pay.

Therefore this means that the concept of normal working hours was equally relevant to a case concerning Results Base Commission as it was to a case concerning non-guaranteed overtime.

However what this case does not provide is any more certainty as to the practical application of the principles in particular with regard to an appropriate reference period.

The closest we have got is guidance from the ECJ that holiday pay must correspond to the workers “normal remuneration”, and it is for the National Court to work that out by taking an average over a reference period that is “considered to be representative”.

However a number of these associated cases are still subject to appeal on various grounds. Therefore pending a definitive ruling on these issues there remains uncertainty for employers about how to deal with a claim for underpaid holiday and how to calculate holiday pay going forward. However it is worth remembering any claims brought on or after 1 July 2015 are limited to deductions where the relevant date of payment fell within 2 years before presentation of the claim.

Up to date employment law advice

For more information and advice about holiday pay arrangements and to check whether your contracts of employments will protect you if an employee should claim against you, call an employment law expert using the contact numbers below.