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In Deksne v Ambitions Ltd [2024], the Employment Appeal Tribunal (‘EAT’) has ruled that a temporary worker can claim back two years of holiday pay from their former employer after the Supreme Court ruling in Chief Constable of the Police Service of Northern Ireland v Agnew [2024] removed a limit barring pay claims that had more than a three-month gap between underpayments.
Deksne, the Claimant, was a temporary worker for Ambitions Ltd since 2017. She argued that a series of unlawful deductions had been made to her holiday pay since August 2019. The appellate tribunal noted that holiday pay rules changed in April 2020 to use a 52-week average for variable-hour workers.
Ambitions Ltd admitted that it incorrectly calculated the amount of holiday they owed to her because they included weeks when she did not work. However, it was noted that there were gaps of over three months between some underpayments. The employment tribunal therefore ruled that a break of three months stopped deductions from being considered part of a series. This decision was based on the Employment Appeal Tribunal judgement in Bear Scotland v Fulton [2016] but notably before the Supreme Court decision in Chief Constable of the Police Service of Northern Ireland v Agnew [2024].
The EAT overturned the tribunal’s decision on the basis that the tribunal had wrongly thrown out Deksne’s claim and fallen into error by taking account of the fact that the interval between the payments was, from time to time, in excess of three months.
Judge Burns wrote. ‘Whether deductions of wages constitute a series is essentially a question of fact answered by taking account of all relevant circumstances including the similarities, differences, frequency, size and impact of the deductions, as well as how they came to be made and applied and what linked them together.’
The deductions did meet the threshold for forming a series since they stemmed from the original incorrect calculation. Therefore, Judge Burns concluded that Deksne was eligible to receive all of her unpaid holiday pay from the start of the two-year period because the payments were part of the series of deductions.
As we head towards the Christmas period, there will be an increase in employees requesting holiday leave. It is imperative that organisations monitor all aspects involved in that process, including the calculation of holiday pay to ensure they are compliant with all their obligations towards their employees such as proper renumeration.
To discuss any of the points raised in this article, including queries and concerns regarding holiday pay, please do not hesitate to contact Daniel Onafuwa, James Baker, or another member of the Employment team.
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