3 month time limit for backdating
However, the Regulations are unlikely to apply in that scenario, because according to case law, untaken holiday will be carried over to the next holiday year.
This means claimants will not have to pay an additional ET fee for alleged underpayments in the months following their original claim.
The Government states that the task force is still continuing to work through the implications of the overtime decisions, so this may not be the last word, but as there is currently no prospect of an appeal in relation to non-guaranteed overtime, employers should now consider making calculations and changes where appropriate.
A claim for pay in respect of untaken holiday (as opposed to holiday which has been taken but was underpaid) can only be paid when employment ends.
The "deduction" is therefore likely to be at the end of employment, rather than a series of deductions stretching back.
With a two-year backstop, a transitional period was needed to ensure a balanced approach for workers who would otherwise have claims potentially reduced in size with no notice of the change.
As part of the discussions, the Government looked at various options including limiting claims to a six-year backstop (similar to breach of contract claims) but introducing the change immediately.It was felt that this did not bring a significant reduction for businesses facing large claims.
Since he would have been QMB eligible in the backdate period, he cannot receive backdated SLMB or SLMB benefits.This is important, because there has been a suggestion that if the right under the Working Time Regulations is contractual as well as statutory, a worker could make a claim for breach of contract for underpaid holiday pay, for which the limitation period is 6 years (and so get round this 2 year limitation).However, employers should check the provisions of all employment contracts to see what the contractual rights are, and whether in some way the right to holiday pay is linked to the WTR (in which case the interpretation of holiday pay under the WTR might give the employee a contractual right to have non-guaranteed overtime and commission included in holiday pay, with 6 years in which to bring a claim)."Wages" in this context includes "any fee, bonus, commission, holiday pay or other emolument referable to [a worker's] employment whether payable under his contract or otherwise".However some payments are not limited, such as Statutory Sick Pay, guarantee payments, protective awards and Statutory Maternity, Adoption, Paternity and Shared Parental Pay.One interesting question is whether the limit could have any effect on backdated holiday pay claims where the worker has been on long term sickness absence.