Claimant v HHGL Limited t/a Homebase (in administration)
Outcome
Individual claims
The tribunal found that the claimants' remuneration fell under section 221(2) of the Employment Rights Act 1996 because commission payments were results-based, not linked to the amount of work done. Commission could not be included in the week's pay calculation for redundancy purposes, which is limited to basic contractual salary under section 221(2).
The tribunal found that notice pay calculation must also be based on section 221(2) of the Employment Rights Act 1996, excluding commission. The claimants were not entitled to notice pay calculated on average total remuneration including commission, only on their basic contractual wage.
Facts
Ms Rogers and 7 other kitchen designers were made redundant when Homebase entered administration in November 2024. They were paid basic salary plus results-based commission. The Insolvency Service calculated their redundancy payments and notice pay using only their basic salary, excluding commission. The claimants argued that their average total earnings (basic plus commission) should have been used to calculate a week's pay, as commission formed a substantial part of their regular wages.
Decision
The tribunal dismissed all claims. It held that the claimants' commission was results-based, not linked to the amount of work done. Therefore, under section 221(2) of the Employment Rights Act 1996, only their basic contractual salary could be used to calculate a week's pay for redundancy and notice pay purposes. The enhanced protection for commission that applies to holiday pay under EU law and the Working Time Regulations does not extend to redundancy or notice pay calculations.
Practical note
Results-based commission schemes, even where commission forms the majority of earnings, fall under section 221(2) ERA 1996 and cannot be included in redundancy or notice pay calculations, distinguishing them from productivity-based or piecework schemes under section 221(3).
Legal authorities cited
Statutes
Case details
- Case number
- 2302764/2025
- Decision date
- 5 September 2025
- Hearing type
- full merits
- Hearing days
- 1
- Classification
- contested
Respondent
- Sector
- retail
- Represented
- No
Employment details
- Role
- Kitchen designer
- Salary band
- £40,000–£50,000
Claimant representation
- Represented
- No