13 August 2010 #Employment
The House of Lords in HM Revenue & Customs v Stringer  held that claims for holiday pay can be a series of deductions. Since the decision, employers have been apprehensive that employees who have been off sick for several years may be able to claim backdated holiday pay for the whole period upon termination. This issue came to light in the recent case of Khan v Martin McColl .
At the time of commencing long-term sick leave in May 2008, Mr Khan had accrued 6 weeks` unpaid and untaken holiday (2 weeks` of which had been carried forward from 2007 and the remainder being Mr Khan`s entitlement for 2008). Mr Khan did not return to work and resigned in August 2009.
Upon termination, Mr Khan was paid in lieu by Martin McColl for the holiday he accrued during 2009 only. Consequently, he brought a claim for the 6 weeks` accrued but untaken holiday (from 2007 and 2008), arguing that his employer had made a series of deductions from his wages. The claim was defeated on two fronts:
Whilst this is only a tribunal decision, it will be persuasive. The case is interesting as it demonstrates that employers can potentially defeat claims for over one year`s holiday entitlement by making a payment covering the employee`s most recent leave year.