News Updates

Unlawful deductions – limiting retrospective claims

Friday 19th May 2017

The EAT in Fulton & anor v Bear Scotland Ltd, has confirmed that in a claim involving ongoing unlawful deductions, a gap of more than 3 months between those deductions will break the series and the ET will not have jurisdiction to hear the earlier claims.  

When this case, and two related appeals, were previously before the EAT in 2014, the EAT held that the Working Time Directive requires overtime to be taken into account when calculating holiday pay in respect of the minimum 4 weeks’ leave granted under EU law. In addition, the EAT held a gap of more than 3 months between a series of underpayments was fatal to the earlier claims.

This limits the ability of workers to bring retrospective claims. The EAT also held that workers are not entitled to retrospectively designate which holidays were EU holidays and which were granted under UK legislation. The case was then referred back to the ET to apply the EAT ruling.

Two of the Claimants appealed, arguing that the previous EAT decision on the 3 month gap was not binding, but created only a strong presumption. The EAT disagreed, holding that the previous EAT decision was a binding precedent which focused on the legal context - that consecutive deductions must relate to the same subject matter and occur within 3 months. If those requirements are not satisfied, an ET will only have jurisdiction if it finds it was not reasonably practicable to bring the claim in time and accordingly extends time.

All information in this update is intended for general guidance only and is not intended to be comprehensive, or to provide legal advice.