Holiday Pay Claims

Louise Walker
Louise Walker
Legal Director
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A gap of more than three months breaks the series of alleged unlawful deductions.

The Employment Appeal Tribunal (EAT) has this week confirmed its earlier decision regarding whether a gap of three months or more in a series of deductions from wages breaks the chain of liability for the employer.

As reported in previous updates in March 2017 and October 2016, the EAT had previously confirmed that payments in respect of non-guaranteed overtime must be included when calculating holiday pay. The EAT had also been called upon to look at the question of whether some of the Claimants’ claims were time-barred (that is, claims for certain sums would not be able to be heard by the Employment Tribunal).

The EAT had decided previously that Claimants would not be allowed to bring claims for alleged underpayments of holiday pay for any sums which they claimed were due in circumstances where there was a gap of three months or more between the underpayments.

The Claimants appealed on this point, suggesting that the EAT’s previous decision had not been legally binding, but rather had only been non-legally binding comments.

However, the EAT has this week disagreed, rejected the appeal, and clarified the position, confirming that the decision had been binding and that the EAT’s previous decision still applied.

Accordingly, where there is a gap of more than three months between any instances of alleged underpayment or non-payment of wages, this gap breaks the chain of alleged unlawful deductions, meaning that any claims attempted to be brought at tribunal beyond that three month ‘gap’ point would be disallowed.

Should you wish to read the decision in more detail, you can do so here:

If you would like to discuss the implications of this decision further, or you require support on any employment law matter, please do not hesitate to contact the team on 0141 331 5150.

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