An employers group has blasted a recent report issued by a European Court of Justice advisor stating that holiday pay should reflect sales commissions that are usually earned by employees.

That led the Federation of European Employers (FedEE), a trade association for multinational employers, to issue a press release entitled, “The European court has lost its way”, stating the court had no authority to rule on remuneration and repeatedly “operates as the guardian of its own prejudices”.

The legal case was filed by a Z.J.R. Lock, a sales representative serving business clients for British Gas. Lock earned, on average, more than 60% of his total compensation in commissions, according to the report by Yves Bot, one of eight advocates general at the EU’s top court. Bot noted that commissions are paid when contracts are executed, not when they are first signed by customers.

After taking his statutory holiday leave in December 2011 and January 2012, Lock’s pay dropped in subsequent months because he had not been able to make any new sales during his break.

In November 2012, Lock filed a claim for outstanding holiday pay with the Employment Tribunal in Leicester, saying he should have been paid the average amount of the commissions he typically earned during his vacation period.

The labour court then asked the ECJ in February if such a claim would be consistent with the EU’s working time directive.

Bot: Commissions are “constant component” of pay

On December 5, in a preliminary opinion, Bot said that it was.

He wrote that: “remuneration paid in respect of annual leave must, in principle, be so determined as to correspond to the normal remuneration received by the worker”.

Bot also concluded that: “although the amount of commission may fluctuate from month to month depending on the results obtained by Mr. Lock, such commission is none the less permanent enough for it to be regarded as forming part of that worker’s normal remuneration. In other words, it constitutes a constant component of his remuneration. A consultant who carries out his tasks satisfactorily within British Gas will receive commission each month in addition to his basic pay.”

If commissions are not calculated as part of holiday pay, that “would mean that a worker such as Mr. Lock [would be] deterred from exercising his right to paid annual leave and therefore continu[e] to work”, the advocate general wrote.

FedEE: ECJ oversteps its bounds

On Monday, FedEE secretary general Robin Chater said in the organisation’s statement that: “neither the ECJ nor EU legislators drawing up the Working Time Directive itself have had any powers in respect to remuneration--in any form except gender-based equal pay. Article 153 of the EU Treaty specifically excludes such powers.”

In FedEE’s view, the court frequently oversteps its authority. “Such has been the case in the past when labour cartels have been found not to infringe EU anti-trust rules or when giving paid holiday rights when staff have been on sick leave--as if those recovering from sickness need to take another break to recover from the work they have not been performing.”

The group also argued that “annual leave was taken into account by the company when setting commission levels”.

The case is number C-539/12 (Lock v British Gas). It will now be examined by a full panel of ECJ judges, who will deliver a final ruling independent of Bot’s report. However, in the majority of ECJ cases judges agree with the advocate general’s opinion.

No date has been set for the ECJ hearings.

As of this writing, a court spokesman had not returned Delano’s message seeking comment.