Friday, 19 December 2014

Holiday Pay - Cap on Backdated Claims

The government has introduced the Deduction from Wages (Limitation) Regulations 2014. They do two things:-

(1) 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 SMP, SSP and guarantee payments, which remain unaffected); and,

(2) explicitly state that the right to paid holiday is not incorporated as a term in employment contracts.

The effect? To remove any chance employees have of bringing long-term claims for back holiday pay, either in the tribunal or civil courts. But the new Regulations don't apply to ET1s presented before 1st July 2015 - so anyone with a potential long-term backpay claim who wants to gamble on somebody else appealing the Bear Scotland decision should get their claim in now.

Anyone remember Preston v Wolverhampton? The ECJ held that the UK's backstop of two years on equal pay claims was unlawful, and the two year limit had to be removed. But that argument is unlikely to succeed here, partly because of the lesser nature of the right to holiday pay (Directive, as opposed to Article in the Treaty of Rome), and also because the six month delay in implementation gives workers a real chance to put in their claims (which is relevant to proportionality).

No comments: