In force from 8th January 2015, the government has introduced the Deduction from
Wages (Limitation) Regulations 2014 which:
(1) limit all unlawful deduction claims to the period of two years before
the date that a claim form is lodged; and,
(2) explicitly state that the right to paid holiday is not incorporated as a
term in employment contracts. The effect of this is to remove any chance
employees have of bringing long-term claims for back holiday pay, either in the
tribunal or civil courts. The Regulations will apply to any claim brought after
1st July 2015.
Will this afford employers any certainty?
As it stands at the moment, the two time-related restrictions on unlawful
deductions from wages claims are:
a claim for unlawful deductions from wages must be brought within three
months of the deduction. With a series of deductions over a period of time, the
claim must be brought within three months of the last deduction; and,
a series is broken by there being a three month gap at any time, so
preventing claims for deductions prior to that gap. That is the effect of
Employment Appeal Tribunal decisions, but it may be challenged in future
The Regulations will impose a third restriction so that even if there is an
unbroken series of deductions going back many years, a claim can only cover the
two years up to the date the claim was presented to the Employment Tribunal.