More on Holiday Pay!
Posted on: 27/10/2023
Category: For you, For your business
Before the latest case of Agnew that has recently been dealt with in the Supreme Court, the position concerning historic underpayments of holiday pay was that if there were more than three months between the deductions then the employee could not claim any beyond the three months’ period. Underpayments often arose due to the payments of holiday pay not including compulsory overtime and/or commission payments.
The situation appears to have changed now following the Agnew case which originated in Northern Ireland. The employees claimed underpayments of holiday pay as compulsory overtime had not been included in the calculations. The employer agreed that there was an underpayment but did not agree that the employees were entitled to claim for payments that were more than three months after the last deduction.
The Supreme Court decided that where there are underpayments of holiday pay by an employer, if the money was due to be paid by the employer but for the three months’ cut-off period, the employees should be able to claim for those underpayments if they are part of a series of deductions and the claim for the last deduction is brought in time in accordance with the normal three months’ plus ACAS Early Conciliation period limitations.
The Court said that whether such a claim is part of a series is a question of fact and all relevant circumstances must be taken into consideration.
Currently we have a fall-back position in that unlawful deduction of wages (therefore including holiday pay) can only be claimed as far back as two years from the first deduction. Watch this space as this may yet be challenged too in light of the Agnew decision.


Guy Salter
If you have any questions or queries, please contact Guy Salter on +44 1905 723561 or by email at Guy.Salter@smesolicitors.co.uk.