The case of Lock is part of the long and apparently ever more complicated saga relating to exactly what should be included when calculating holiday pay. Mr Lock's initial claim was that his holiday pay should include commission payments he earned when working. A reference to the European Court of Justice confirmed commission payments were directly linked to the work carried out by Mr Lock and accordingly should be taken into account. The Tribunal took this into account by inserting new wording into Regulation 16(3) of the Working Time Regulations 1998.
British Gas appealed the finding to the EAT on two grounds. Firstly, they argued that the Tribunal was wrong to take into account the judgement of the EAT in an earlier case, Bear Scotland Limited & Others v Fulton, which had found that non-guaranteed overtime should be included in holiday pay, because overtime and commission are two distinct concepts. Secondly, they argued that the EAT had wrongly concluded in the Bear Scotland case that domestic legislation could be purposively interpreted to give effect to EU law. The EAT heard the appeal in December 2015 and the judgement was issued on 22 February 2016 (see our reports here and here) and found against British Gas.
British Gas then successfully sought permission to appeal the case to the Court of Appeal. The grounds of appeal were that the Tribunal had over-reached itself by amending the Regulations in its attempt to be able to interpret them consistently with EU law (because the amendment went against the clear meaning of the Regulations) and that the approach taken by the EAT in upholding the Tribunal's decision was precluded by previous court decisions on statutory interpretation (because it would offend against the principles of legal certainty and non-retroactivity).