The Deduction from Wages (Limitation) Regulations 2014 (SI 2014/3322) (“the 2014 Regulations”) came into force on 8 January 2015. The 2014 Regulation was implemented in response to the decision in Bear Scotland Ltd and others v Fulton and others (UKEAT/0047/1) (briefly, that holiday pay under regulation 13 of the Working Time Regulations 1998 must be calculated to include non-guaranteed overtime) and to seek to limit the impact on businesses in the event of employees seeking to claim holiday pay going back many years.
The 2014 Regulations limit claims for holiday pay (as well as any other ‘wages’ claims under s.27(1) of the Employment Rights Act 1996) to a two year retrospective period from when the claim is issued. This only applies to claims issued after 1 July 2015 so there is still plenty of time for employees to submit claims for holiday pay in excess of 2 years of underpayments.
The 2014 Regulations also seeks to ensure that regulation 16 of the Working Time Regulations 1998 does not confer a contractual right to take annual leave (albeit, the employee’s actual contract of employment may already confer that right). The aim of which is an attempt to ensure employees cannot use the civil courts by a means of redress to avoid the new two year limit.
Vicky Allum, Solicitor at Just Employment Ltd