Danish Metalworkers’ Union acting for A
DGS af 2011 A/S in bankruptcy
The case concerned whether the employee, who had worked in advertising sales at the business directory De Gule Sider A/S, had received sufficient compensation for not earning commission during his holiday from 11 July to 7 August 2011.
According to the contract applicable to A during the period in which he took his holiday, his pay comprised a fixed monthly basic salary of DKK 30,000 and a commission component. The basic salary was independent of the actual earnings, while A earned the commission if his earnings during a month exceeded the basic salary. If his earnings during a month were lower than the basic salary, the negative commission was transferred to the following month, and the commission would then only be paid when he had covered the negative balance in the following month(s). A negative balance could not be deducted from his basic salary.
A had received the fixed salary during his holiday in the summer of 2011, and in addition, he received an amount corresponding to 12.5% of the commission earned in 2010 in holiday allowance in accordance with this contract and the Danish Holiday Act.
The Supreme Court stated that there was no basis for determining that the pay component consisting of a fixed monthly amount of DKK 30,000 actually represented an on-account commission, which would mean that A was entitled to claim a 12.5% holiday allowance on this pay component as well.
In addition, the Supreme Court noted that the contract took account of, among other things, days of holiday in the setting of commission targets. Accordingly, in this arrangement the lack of opportunity to earn a commission during periods of holiday would be compensated during the year. Against this background, the Supreme Court found that it was not decisive whether the negative commission that may have accrued during periods of holiday exceeded the holiday allowance of 12.5% of the commission income of the previous year.
The Supreme Court also found that the compensation given to the employee was in accordance with Article 7 of the EU Working Time Directive (Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time), cf. paragraphs 24 and 35 of Judgment of the European Court of Justice of 22 May 2014 in case Z.J.R. Lock v British Gas Trading Limited, case C-539/12.
The Supreme Court thus affirmed the judgment of the High Court.