HAPPY NEW YEAR – HOLIDAYS OVER!
2015 already! It is hard to believe that it is over 15 years since we were all preparing for the end of the world due to the millennium bugs causing computers to stop working in the year 2000! Where does the time go? They say time flies when you’re having fun!
We wouldn’t necessarily describe Health and Safety, Food Safety and/or Employment Law as ‘fun’ but it can be a bit of a ‘rollercoaster’ at times. Lets kick off 2015 with a regular ‘pot boiler’ topic…
In 2014, the ‘rollercoaster’ was various judgments from the Europe and the UK appeal courts surrounding holidays and the calculation of holiday pay. You may remember our Information Update (2014/14) on holiday pay following the judgment of the Employment Appeal Tribunal, which determined that non-contractual overtime should be included in the calculation of holiday pay.
Whilst the widely held view amongst legal commentators is that the judgment is flawed, and that the decision may subsequently be reversed by the Court of Appeal/Supreme Court, the Government introduced legislation to deal with one specific aspect of the holiday pay debacle!
The specific issue is that workers could potentially seek to recover the ‘series of underpayments’ to their previous holiday pay payments potentially going back to when they joined their current employer. Of course claims cannot be made that pre-date 1998 when the Working Time Regulations came into effect. The EAT judgment included a point that claims for arrears of holiday pay will be out of time if there has been a break of more than three months between successive underpayments (subject to the reasonable practicability test).
Deduction from Wages (Limitation) Regulations 2014
Notwithstanding this point, if there has been no break of more than 3 months between successive underpayments, the worker could seek to recover the underpayment of holidays going back years! To prevent employees making claims going back to 1998, the Government has laid before Parliament (on 18th December), the Deduction from Wages (Limitation) Regulations 2014 which seeks to limit all unlawful deductions claims to two years before the date the claim is lodged.
The government has said the aim of this Statutory Instrument is to curb the potentially damaging costs for employers, BUT the problem is that whilst the Statutory Instrument comes into force on 8th January 2015, this limiting piece of legislation will only apply to Tribunal claims presented on or after 1st July 2015.