New limit on holiday pay claims

The Government has introduced the Deduction from Wages (Limitation) Regulations 2014.

Firstly, these new regulations will limit all unlawful deductions claims to two years before the date the ET1 is lodged (with the exception of certain categories of unlawful deductions claims such as claims for Statutory Maternity Pay, Statutory Sick Pay and guarantee payments, which remain unaffected); and, secondly these regulations also explicitly state that the right to paid holiday is not incorporated as a term in employment contracts.

These new regulations therefore remove the chance of employees issuing long-term claims for back holiday pay, either in the Employment Tribunal or civil courts.

However, the new Regulations do not apply to ET1s presented before 1st July 2015 – so any employee with a potential long-term back pay claim for holiday and who wants to gamble on somebody else appealing against recent holiday pay decision in the Employment Appeal Tribunal may seek to issue their particular claim now.

As ever with this particular topic it remains a question of “watch this space” in terms of any further developments.

For further information please contact Nick Smith Partner and Head of Employment, direct dial 0191 212 7739, or email nsmith@mincoffs.co.uk