Is Holiday Pay paid at basic or an average of the last 12 weeks (incl commission)?

I work in a sales job in which I have a basic of € 21,000 and typical earn between € 50-60k on top of that as month commission.

My employer has been paying holiday pay based on the €21k pa figure, is this correct. Somebody said to me that its employment law that it should be an average of the previous 12 weeks earnings.

Anyone any thoughts?

GBG

Re: Is Holiday Pay paid at basic or an average of the last 12 weeks (incl commission)

On the face of it, it would appear that you should be paid annual leave at the average of the 13 weeks prior to taking the leave. Contact if you have any queries or alternatively contact a trade union.

from Sitpu.ie
How To Calculate An Employee’s Holiday Pay

The method of calculating the normal weekly rate of remuneration is as follows –

if the employee’s pay is calculated wholly by reference to a time rate or a fixed rate or salary or any other rate that does not vary in relation to the work done, the normal weekly rate of their pay for the purpose of holiday pay shall be the sum – including any regular bonus or allowance which does not vary in relation to the work done but excluding overtime pay – that is paid in respect of normal weekly working hours last worked by the employee before the Annual Leave commences;

if the employee’s pay varies with the amount of work done or by any other system, the normal weekly rate of pay, for the purpose of holiday pay, shall be the sum that is equal to the average weekly pay – excluding any overtime pay– calculated over the thirteen weeks immediately before the Annual Leave or, if no time was worked in that period, the thirteen weeks ending on the day time was last worked.

If confusion persists, reference should be made to the Organisation Of Working Time (Determination Of Pay For Holidays) Regulations, 1997, SI 475.

Note that although overtime pay is expressly excluded from holiday pay by the Act, the Labour Court has recommended that it be included where it can be shown that the overtime was regular and rostered .


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From the Department of Enterprise, Trade & Employment – explanatory booklet on holidays and public holidays for employers and employees:

“If the employee’s holiday pay is not calculated wholly by reference to matters referred to above (e.g. employees who earn commission or work on piece or productivity rates), the amount paid to him/her for one week of paid annual leave is equal to the average weekly pay of the employee (excluding any pay for overtime) calculated over the period of 13 weeks ending immediately before annual leave commences. If no time was worked by the employee during that period, the average weekly pay is calculated over the period of 13 weeks ending on the day on which time was last worked by the employee before annual leave commences”


So it looks like your friend is correct.

Re: Is Holiday Pay paid at basic or an average of the last 12 weeks (incl commission)

This leads to an interesting question:

Suppose a sales person is in the cider business. (it could be any seasonal business). They work very hard and get good commission for the summer months. In order to optimise their holiday pay they should take all their leave in september and not in December when the commission for OCT/NOV/DEC would be very low. This leads to a conflict between the company and the employee. The company dont want their best sales people heading off in midseason and the employee is not inclined to loose money by taking off time at chrismas.

Sounds like your employer is trying to shaft you.

Re: Is Holiday Pay paid at basic or an average of the last 12 weeks (incl commission)

ajapale said:

This leads to an interesting question:

Suppose a sales person is in the cider business. (it could be any seasonal business). They work very hard and get good commission for the summer months. In order to optimise their holiday pay they should take all their leave in september and not in December when the commission for OCT/NOV/DEC would be very low. This leads to a conflict between the company and the employee. The company dont want their best sales people heading off in midseason and the employee is not inclined to loose money by taking off time at chrismas.

Click to expand...

It is the employers right to refuse leave to an employee. I'd expect that in the "cider" business that it is understood/agreed that long periods of leave are not taken during the busy period.
I'd assume something like this could be easily resolved by compromise - averaging the commision across 12 months when calculating hol pay.