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Opinionopinion

A kick in the teeth for firms and a gift for º£½ÇÊÓÆµIP

A judgment was handed down by the Court of Justice of the European Union, stating that Mr Z J Lock was entitled to his commission being paid whilst he was on his annual leave.

Last Thursday, when the electorate was voting in the local and Euro elections, a judgment was handed down by the Court of Justice of the European Union, stating that a certain Mr Z J Lock, who worked as a salesman for British Gas, was entitled to his commission being paid whilst he was on his annual leave.

This judgment has dramatic implications for º£½ÇÊÓÆµ firms, for the directive was implemented in 2008. Therefore Mr Lock is entitled to a nice fat cheque covering holiday pay for six years.

It also means another chunk of paperwork that all employers will have to maintain, ensuring that the law is complied with.

However, this gift to Nigel Farage does not end there, for I believe that it means that all payments made to employees in addition to basic pay will inevitably, sooner or later, be covered by this judgment.

By way of illustration, workers who are on piece work rates will argue that they are fully entitled to receive their average weekly earnings paid when they are on holiday, rather than at the basic rate.

The implications of this, when translated into an employer’s liability, could be a crippling financial blow that may well send some companies to the wall, for there is no way that they could have made provision for such a staggering liability.

The cost implications will have to be built into quotations when tendering for work and it immediately puts all European businesses, including the United Kingdom, at a disadvantage compared with the rest of the world.

For employees who are specifically covered by this ruling on commission, it will be very good news, bringing an unexpected windfall. Employers who fail to tackle the problem can only be hit with increased costs.