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Legal Updates

A way to avoid backdated holiday pay claims?

28 July 2010 #Employment

Ever since the House of Lords ruled in HM Revenue & Customs v Stringer and others last year that employees could claim accrued but untaken annual leave going back a number of years, as part of a series of unauthorised deductions, if they had been unable to take the leave owing to sickness absence, employers have been looking for a way to mitigate the effects of that decision.


The time limit for filing unlawful deductions claims with the ET is 3 months from the date of the last deduction in cases involving a series of deductions. This allowed claimants to claim back dated payments in respect of annual leave accrued in previous leave years.


The ET in Kahn v Martin McColl, has held that employers can potentially defeat claims for over one year`s holiday entitlement by making a payment covering the employees most recent leave year.  This is because the series of deductions would be broken by the payment of the annual leave accrued for that year, which may mean that the last deduction in the series was outside the three month statutory time limit.


The ET decision is not binding on other Tribunals or Courts, but will be persuasive and the judgement offers employers a creative way to avoid significant liability in holiday pay claims.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
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