The Employment Rights Act 1996 does not currently
set a limit on how far backwards employees can go
in claims for unlawful deductions from wages. This
is about to change. Any claims which are presented
on or after today (1 July 2015) will only be able to
recover underpayments going back two years.
The Deduction from Wages (Limitation) Regulations 2014 came
into force on 8 January 2015 and were introduced with the aim of
mitigating the impact on employers of recent case law relating to
unpaid holiday pay, although the cut-off covers most other deductions
from wages also and not just alleged underpayments for holiday.
The Regulations introduce a backstop period of two years, i.e.
Tribunals will only be able to consider deductions from wages claims
where the deduction was made within the two years before the
worker brought his claim, whether or not it forms part of a series of
such deductions.
These Regulations do not alter the fact that in order to bring an
unlawful deductions from wages claim, workers will still have to
bring their claim within three months of the alleged underpayment
(or the last one in a series) and any break of three months between
underpayments could still break the chain, as per the EAT’s comments
in Bear Scotland Ltd v Fulton & anor.
