Under the Working Time Regulations 1998, when your employment ends, you are entitled to a payment in lieu of holiday accrued but untaken to the termination date.

Sometimes however, you may find that you have been underpaid for earlier periods of holiday taken by you, especially if your pay varies from month to month, for example because you receive commission.

Any claim for underpayment of holiday should be instigated in the Employment Tribunal within 3 months less a day from the date of the deduction / underpayment complained, of, or the last in the series of deductions / underpayments complained of by first submitting an ACAS Early Conciliation Request.

However when looking at a series of underpayments over time, the courts previously said that there should be a gap of not more than three months between one underpayment and the next. So if you were underpaid in January and then again in September, you would not be able to claim the January underpayment, because more than 3 months had passed.

That has now changed following the Supreme Court’s decision in Chief Constable of Police Service of Northern Ireland v Agnew. The Tribunal can now look at backdated underpayments of holiday pay, even if there was more than a gap of three months between each deduction

Whether a claim in respect of two or more deductions amounts to a ‘series of deductions’ is still a question of fact though, taking into account all relevant circumstances.

However, there is still a backstop of two years for such claims: Following the introduction of the Deduction from Wages (Limitation) Regulations 2014, claims for underpaid holiday pay can now only be backdated for two years.

If you think you have been underpaid holiday pay, call us on 0207 118 0950 or email us at info@reculversolicitors.co.uk

With thanks to barrister Daniel Barnett for news of this decision.