Has the Position Changed When Claiming Backdated Holiday Pay?
Since the Employment Appeal Tribunal case of Reid v Camphill Engravers over 25 years ago, the law had been settled when employment tribunals were considering a series of deductions for the purposes of a bringing an employment tribunal claim for unauthorised deduction from wages under section 13 of the Employment Rights Act 1996 (ERA).
Subject to the rules on Acas early conciliation, under section 23(3) of the ERA employment tribunal claims in respect of a series of deductions the 3-month time limit begins to run from the last deduction. Therefore, it did not matter what the length of time was between the unlawful deductions to be able to claim all losses as part of a continuing act.
Under section 27 of the ERA, the term wages include, among others, holiday pay.
The position changed in 2014, where controversially, in the conjoined Employment Appeal Tribunal cases of Bear Scotland Ltd v Fulton, Hertel (UK) Ltd v Woods and Amec Group Ltd v Law it was decided that a gap of more than 3 months between deductions broke the chain in the series of deductions. There was no appeal against this ruling and it has subsequently been followed by employment tribunals.
However, the landscape appears to have changed again by the Court of Appeal in Northern Ireland in Chief Constable of Northern Ireland Police v Agnew. In this case,
the court decided that if a gap of more than 3 months between deductions broke the chain in the series of deductions it could lead to ‘arbitrary and unfair results’. The court further found that a ‘sufficient similarity of subject matter, such that each event is factually linked with the next … in the alleged series … would be enough to amount to a series of deductions’. Therefore, if the subject matter were holiday pay, and those deductions occurred over a period where the gap between such deductions was more than 3 months did form part of a series of deductions.
Although the Agnew case, relates to the Employment Rights (Northern Ireland) Order 1996 (ERO) rather than the ERA, it is not formally binding on employment tribunals in Great Britain. However, the wording of the ERO and the ERA where is related to unlawful deductions is identical and arguably as Agnew was decided by a higher court it will be persuasive when employment tribunals consider a series of deductions.
Holiday pay claims (as are other unlawful deduction from wages claims) under section 13 of the ERA capped at 2 years losses by the Deduction from Wages (Limitation) Regulations 2014.
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