Holiday Pay: Important Update - Historic Claims Eliminated
Published byMartin Stephen
In what has been considered a landmark ruling, the Employment Appeal Tribunal (EAT) earlier this month ruled that non-guaranteed overtime should form part of an employee’s holiday entitlement. This had the effect of increasing the holiday entitlement of many UK employees at the expense of their employer.
A significant aspect of the ruling was the indication that holiday underpayment cannot be treated as an unlawful deduction from pay using each missed payment as the last of a series of deductions. In what can be considered some consolation for employers, this means that in normal circumstances claims will be out of time if there has been a break of more than 3 months between successive underpayments.
The trade union involved in this case, Unite, has now indicated it will not be appealing this part of the decision. Although this is clearly good news for employers, they should be aware that the decision may be challenged by another party in the future. For the time being however, employers can take comfort from the fact that Unite’s decision has the practical effect of eliminating historic claims which are more than 3 months old.
More information from Martin Stephen: mss@wjm.co.uk or the Employment Team: employment@wjm.co.uk
