Many of you will be familiar with the long-running litigation relating to statutory holiday pay known originally as Ainsworth v Commissioners of Inland Revenue and, more recently, as Stringer v HMRC.
A discrete issue arising in the case was whether claims for accrued unpaid statutory leave could only be brought under the Working Time Regulations (“WTR”), which created the right to the statutory leave entitlement, or whether they could also be brought under the unlawful deduction of wages provisions in the Employment Rights Act 1996 (“ERA”), the significance being that the latter has more generous time provisions for bringing the claim. A breach under the WTR must be brought before a Tribunal within three months of the initial breach whereas an unlawful deduction claim must be brought within three months of the deduction or, in the case of a series of deductions, within three months of the final deduction.
The House of Lords, overturning the Court of Appeal judgment on the issue, has ruled that workers can rely on both provisions to bring their claims. A claim by an employee for compensation for unpaid holiday pay was equally “…a sum payable under his contract or otherwise...” and, so, fell within the scope of the unlawful deductions provisions, thus meaning that the exposure of employers to what might have been understood to be “stale” claims is rather greater than had previously been widely recognised.