How to I deal with claims for backdated holiday pay?

The ruling made it clear that the UK law is incorrect and as such employees are entitled to backdate their claim to previous periods of holiday pay.

However, the Tribunal have limited that period of backdating to a maximum of 2 years, and only when there is a break of less than 3 months in a ‘series of underpayments’. If there is a period of more than 3 months where holiday has not been taken, that will break the chain and thus backdating will cease from that date.

In essence, this means that the employee will have to trace back to each period of holiday they have had, and if this holiday is taken within 3 months of the last one, they can go further back, until there is a break of more than 3 months:



An employee takes the following holiday over an annual leave year;

13 January – 20 January – Paid on 28 January 2014

14 April – 16 April – Paid on 28 April 2014

5 May – Paid on 28 May 2014

16 June – 23 June – Paid on 28 June 2014

20 August - 27 August – Paid on 28 August 2014

20 October – 22 October – Paid on 28 October 2014


The employee would be able to back date up to the leave taken on 14 April 2014, as this is where the chain will break, due to there being more than 3 months since there previous holiday period.



Remember
these rules will only apply to the 4 weeks annual provided for in the EU Directive.

 

In the above scenario, if it is deemed the employee takes their core 4 weeks entitlement first, the date of the first unlawful deduction would be on 28 October 2014, as this is the first day of the employees additional 1.6 days leave. In the above scenario it would not alter when the break in the chain occurred.