And speaking of around £8,000 brings me to the case of Mr P Clark v Peninsula Business Services Ltd, in the Employment Tribunal had to determine whether an employer had unlawfully deducted from an employee’s pay by failing to include commission in holiday pay calculations.

Mr P Clark was employed as a Business Development Manager at Peninsula Business Services from 1 March 2022, with a basic salary of £30,000 and commission payments based on sales generated for the company. On 31 December 2023, Mr Clark resigned and subsequently served his four-week notice period. Following his resignation, he filed a claim on 25 February 2024, arguing that Peninsula had failed to include commission payments in the calculation of his holiday pay for leave taken before his resignation.

Since commission was an integral part of his gross salary, Mr Clark contended that it should have been included in his holiday pay. While both he and Peninsula agreed on how to calculate the commission, they disagreed on the applicable period for the non-payment. This dispute led to the claim being heard by the Employment Tribunal in February 2025.

The key issues the ET had to address involved whether commission should be included in holiday pay calculations. First, the Tribunal had to decide whether the principles established in Lock v British Gas applied to Mr Clark’s employment. Lock was the leading authority establishing that commission should be included in holiday pay. The company argued that following the UK withdrawal from the EU and the Retained EU Law (Revocation and Reform) Act 2023, this judgment can no longer be relied on.  Even if Lock does still apply, the company argued that it should not apply to the final nine months of Mr Clark’s employment. The reasoning for this is that commission was paid nine months in arrears and during this period Mr Clark was looking for a new job. Therefore, argued the company, Mr Clark was not dissuaded from taking his holiday due to losing commission. 

The ET carefully weighed the legal arguments and the facts presented. It acknowledged that the Working Time Regulations 1998, which implemented the EU Working Time Directive, remained in effect post-Brexit, and that the European Union (Withdrawal) Act 2018 preserved EU-derived domestic legislation and case law applicable before the end of the Brexit transition period.

The Tribunal ultimately rejected Peninsula's argument that post-Brexit legislative changes impacted the application of these principles. The ET emphasised that Lock addresses the broader concern that excluding commission from holiday pay could discourage employees from taking leave. Since commission was part of Mr Clark’s regular remuneration, the Tribunal ruled that it should be included in the calculation of his holiday pay. Mr Clark could rely on Lock for the entirety of his employment, including the final nine months, even if, during this time Mr Clark was not actually dissuaded from taking his leave.  In conclusion, the Tribunal found in favour of Mr Clark, ordering Peninsula to pay £8,483, which represented the gross amount of unpaid commission related to holiday pay from 1 March 2022 to 31 December 2023.

This case reinforces that commission payments must be included in the calculation of holiday pay, even in the final period of employment. It also underlines the importance of properly including all forms of remuneration, like commission, in holiday pay calculations, even when there are delays in payment or an employee is near the end of their employment.