Important Holiday Pay Claims Update - 3 months ruling

On 4 November 2014 the Employment Appeal Tribunal decided three test cases on holiday pay claims.

The judge confirmed that regular additional payments such as overtime should be included in the calculation of holiday pay. The ruling only applies to holiday pay guaranteed under the Working Time Directive which covers the first 20 days of annual leave each year.

This means that going forward employers will have to work out what an employee has actually earned and reflect this in pay when the employee takes annual leave.

The judgement also contained a surprise ruling that significantly restricts the ability to claim back pay for previous underpaid annual leave.

Any claim for unpaid wages has to be made within three months of the underpayment. Claims can be made for a series of underpayments, but only if there is less than 3 months between underpayments.

The EAT decision may be appealed but for now any underpayments must be linked by gaps of less than three months in order to form a series for back pay claims. Click here for more details, examples and action to take if you think you are affected ...

Holiday Pay Claims Important Update

Since our earlier briefings on holiday pay claims, a number of employers have attempted to limit their liability for back pay by including additional money for holiday pay in workers’ pay.

This triggers the time limit for claims with the effect that many claims may go out of time. Where this has been done by a large employer like a local authority, you will already have received advice from UNISON.

If your pay now includes an element of additional pay, the time for bringing a claim will have started from the date on which you were last underpaid holiday pay. If there are more than three months since the last time holiday pay did not include additional sums, then you will be unable to pursue a claim.

Your branch will be sending out a more detailed briefing very soon, but you should contact them now if you think you are running out of time because your employer has made additional payments for past underpaid holidays. More details at http://www.unison-scotland.org.uk/holidaypay.html