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Holiday pay commission ruling to have major impact on staffing industry

An employment tribunal ruled on Wednesday that UK law must be brought into line with a decision from the European Court of Justice, which said commission payments should be included in holiday pay calculations for those workers whose total pay usually includes an element of commission.

Responding to the news, Juliet Byrne, legal director at professional umbrella employer Parasol, said: “This ruling clearly has the potential to have a major impact on the UK staffing industry.

“There will also be repercussions for any agency that operates a PAYE scheme for contractors and temporary workers working in sales-orientated roles, but does not factor in commission when calculating holiday pay.

“While it’s possible that the ruling will be appealed, I would nevertheless urge staffing firms to review their supply chain and ensure that their umbrella providers calculate holiday pay correctly.

“Compliant, professional umbrella employers such as Parasol offer contractors and temporary workers holiday pay as part of their employment terms. At Parasol we have always factored commission into our contractor employees’ holiday pay where relevant, and continue to do so. The ruling will therefore have no impact on either us or our employees.

“For staffing firms, the ruling is yet another example of the growing complexity of employing contingent workers.”

Parasol is part of the Optionis Group. The company has employed more than 70,000 contractors and temporary workers since its launch in 2000. 

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