Mr. Lock (C) earned a fluctuating amount of monthly commission that made up over 60% of earnings with his employer, British Gas Trading Ltd and Others (P). Questions were raised by C concerning the manner in which the amount of the remuneration paid during annual leave is to be calculated.

The issue raised was whether or not, when remuneration received by a worker comprises of a fixed component and an inconstant competent, the latter must form part of the remuneration to which a worker is entitled in respect of his paid annual leave. C was on paid annual leave from 19 December 2011 to 3 January 2012. During this period his pay comprised of basic pay and the commission he had eared in previous weeks. Given that C did not carry out any work during his periods of annual leave, he was unable to create any commission during this period and this had an adverse impact on his salary for the months following his annual leave. C initiated proceedings for outstanding holiday pay in respect of the above period.

The ET decided to stay proceedings and refer the following questions to the Court of Justice for preliminary hearing; (1) does Art 7 of Directive 2003/88/EC concerning the organization of working time require that Member States take measures to ensure that a worker is paid in respect of periods of annual leave by reference to the commission payments he would have earned during that period, had he not taken his leave, as well as his basic pay?; (2) what principles apply in reaching this decision; (3) if Art 7 does require such measures, what principles if any are required to be adopted by Member States in calculating the sum payable to the worker by reference to the commission the worker would or might have earned if he had not taken annual leave?

It was held that in a situation in which the remuneration received by a worker comprises of both basic pay and commission, the amount of which is paid by reference to sales made and contracts entered into by the employer in consequence of the worker’s own work, Art 7 requires such commission to be included in the basis for calculating the remuneration payable to that worker in respect of his period of paid annual leave.

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