Restriction on backdated holiday pay claims now in force
From 1 July 2015, The Deduction from Wages (Limitation) Regulations 2014 limits the period of time in respect of which employees can claim backdated, underpaid holiday pay to a period of two years. This applies only to cases raised on or after 1 July 2015. This means that claims for underpaid holiday pay will not be allowed where the date of the payment in question was more than two years before the Tribunal claim was raised. These Regulations are a direct result of the decision in Bear Scotland which decided that non-guaranteed overtime payments should be included in holiday pay calculations. The EAT also held in the Bear Scotland case that claims will be time barred where there has been a break of more than three months between the successive underpayments, thus severely limiting an employee's entitlement to claim any backdated unpaid sums.
Voluntary overtime - Northern Ireland holiday pay appeal case decision
In November 2014, in Patterson v. Castlereagh Borough Council, the Northern Ireland Industrial Tribunal (NIIT), relying on the Bear Scotland case held that voluntary overtime was not part of normal remuneration for the purposes of the Working Time Directive and was not therefore required to be included within holiday pay payments. The Northern Ireland Court of Appeal last month overturned the Tribunal's decision on this point. This means that voluntary overtime may well require to be taken into account when calculating holiday pay. The Northern Ireland Court of Appeal did not provide guidance on this point but rather made the point that it will be a question of fact, for each Tribunal to consider, based on the circumstances of each case.
ACAS Guidance on calculating holiday pay
ACAS has issued new guidance for employers on calculating holiday pay which can be accessed here. The guidance makes the point that it is necessary for employers to give consideration to current legislation and a number of recent court judgments when calculating holiday pay.