In the wake of the EAT’s judgment in Bear Scotland Ltd v Fulton that payments for non-guaranteed overtime must be taken into account in calculating holiday pay, the Government has issued regulations to impose a cap of two years on claims for back pay in unlawful deduction from wages cases.  The change will take effect for claims lodged on or after 1 July 2015; those made before then will be unaffected – although, based on the judgment, such claims are only available for those with a "series of deductions" where there is a gap of less than three months between deductions.

The regulations also provide that, as from 8 January, there is no contractual right to paid leave under the Working Time Regulations.  This is designed to prevent claimants by-passing the new limitation on unlawful deductions claims by bringing a breach of contract claim in the civil courts.