UK: Statutory holiday pay claims - EAT upholds time limits

Employers will welcome a recent EAT ruling in relation to claims for statutory holiday pay, which must be brought within three months of the end of each 'series' of underpayments. The EAT treated as binding precedent an earlier EAT decision that a gap of three months between underpayments breaks the 'series' of deductions.

Given that the requirement to include commission and overtime pay in the calculation of holiday pay only applies to the first 4 weeks' statutory holiday taken, the ruling means that many employees' historic claims will be out of time (even if lodged before, and therefore not affected by, the government's introduction of a 2 year limitation period in July 2015). Many employees may use up their 4 week entitlement within the first 9 months of the holiday year, giving rise to a break in the series of at least 3 months at the end of each year. If they have failed to lodge a deductions claim within 3 months of their last statutory holiday date, they will be out of time. (Fulton v Bear Scotland)