A landmark ruling yesterday could have significant implications for the property industry.
One estate agency owner told EYE last night: “I can see a great many agents cheering and a similar number of property owners weeping at this ruling.”
The ruling relates to the amount of holiday pay that will now have to go to workers who get most of their pay from commission.
The Employment Appeal Tribunal ruled in favour of a British Gas salesman who received only his basic pay while on holiday, but who made most of his money out of commission.
He had asked for his holiday pay to reflect a combination of basic pay and commission.
His case has now been upheld, likely to affect the 700 other employees who have lodged similar claims – not to mention agents who operate low basic pay, but high commission, earnings structures for their own staff.
Yesterday’s ruling also follows one of two years ago which confirmed the right of workers regularly doing extra hours to have overtime reflected in their holiday pay.
Together, the rulings have major implications for agency bosses.
UNISON general secretary Dave Prentis said: “Until now some employees who rely upon commission and overtime have lost a significant amount of money.
“It’s only fair that workers should receive their normal pay, including their regular commission, whenever they take their annual leave.”
Yesterday’s ruling was won after a four-year legal battle by British Gas salesman Joe Lock.
Lock received a small basic salary plus a commission based on the number of contracts he sold. But when he took holiday, he only received the basic salary.
In 2012, with the help of UNISON, he challenged this policy at the Employment Appeal Tribunal after his case was referred up to the EU’s Court of Justice, which ruled in his favour, but British Gas appealed.
Yesterday, the tribunal rejected the appeal and UNISON advised that the ruling applies as of now – and could be backdated two years.
British Gas is, however, asking permission to take its case to the High Court.
Comments (8)
Double edged sword. Has merits in favour of the ruling. Against paying for work they did not do and that is the basis of commission pay. You get paid for results and not being on holiday/away from work. But then if you were on a salary only basis you get paid for being on holiday!
My guys are on office commission so do not see an issue.
Shame on British Gas trying to get out of this, why not put your employees first?
£547m profit – High Court – LOL!
I am as socialist leaning as they come, but I struggle to see the justification for this. If the firm pays a bonus for a very successful year, then has a disastrous year the following year, but is expected to pay extra money, that could easily tip it towards a serious cash flow problem or even insolvency.
In an era of increasing minimum wage levels, having to factor in for paying extra money that might not have been earned by the firm, could easily lead to a check on the number of bodies employed. That’s bad for employees and the business.
It’ll probably be something like:
Holiday pay = number of days * (average daily rate over the last 3 months)
That way it does even out.
To be honest though, my question is that I’ve always been paid on completion – if a property completed while I was away, then my bosses paid me.
Not sure this really applies to sales agencies at all.
Maybe lettings agents where the turnover of properties is faster, perhaps.
“To be honest though, my question is that I’ve always been paid on completion – if a property completed while I was away, then my bosses paid me.”
Yes, but where is the new business coming from when you are on holiday?
Another reason to stay in the EU, and UNISON should start campaigning to its favour.
This sounds utterly and completely justifiable to me.
If the agency is paying good commission, they know they have a good member of staff who will recoup ‘money lost’ on holiday within a month of being back at work.
If the agent is paying bad commission, they won’t mind as much but will be dealing with a less successful member of staff.
And if the agent pays no commission at all… well… get your act together and motivate the players!
Give and take, my friends. It’ll all balance out someday…. won’t it?