25.05.17 EAT Reject Holiday Pay Appeal

In the case of Fulton & Baxter v Bear Scotland [2016] UKEATS/0010/16/JW the Employment Appeal Tribunal (‘EAT’) found itself bound by an earlier decision in the same case that a break of more than 3 months between non-payment or underpayment of wages breaks the series of deductions for the purpose of bringing an unlawful deduction from wages claim.

This means that the decision upheld that claims for arrears of holiday pay will be out of time if there has been a break of more than 3 months between successive underpayments.

The Claimants’ tried to convince the Tribunal that it was not bound by the earlier EAT decision and that they should be reimbursed for all of their underpaid holiday. However, the Tribunal rejected this argument and stated that it was bound by the EAT’s decision on this point.

Mr Baxter was claiming that he had been underpaid holiday from 2007 to 2014 totalling £15,170 and Mr Fulton claimed he had been underpaid holiday from 2008 to 2014 totalling £10,060.

The Claimants lodged an appeal against the decision, however the appeal was dismissed.

Aspire Comment

Whilst this decision will be welcomed by many employers as it provides some comfort that workers will only be able to link underpayments if there are no gaps of 3 months or more between them. It is important to understand your obligations in relation to paying your employees holiday pay and ensuring you are calculating this payment correctly, taking into account the recent holiday pay decision with regard to commission and overtime. to avoid any holiday pay claims.