19th December 2014
Workers who missed out on holiday pay because their overtime was not taken into account when calculating it can only claim back lost money for the past two years.
Following a landmark tribunal in which the courts said workers were eligible for holiday pay linked to overtime, there were fears that companies would be forced to pay out billions in back payments to workers.
Now the government has said there will be a two year limit for claiming back owed money to ease the burden on businesses, but employees could still be in line for payouts worth thousands of pounds.
In a statement the government said it ‘recognises the decision of the court and is today taking action to protect UK business from the potentially damaging impact of large backdated claims’.
‘Changes made to the regulations under the Employment Rights Act 1996 will mean that claims to employment tribunals on this issue cannot stretch back further than two years,’ the statement added.
TUC general secretary Frances O’Grady said the limit was an attempt to ‘water down’ the court ruling as workers should be able to claim six years of back-pay.
‘Failing to count overtime when calculating holiday pay is quite simply wrong. The November ruling was a victory for hardworking people who deserve to be properly paid when they take their well-eared leave,’ she said.
‘Today’s decision to limit all claims for unpaid wages to two years is a blatant attempt to water down last month’s ruling. At the moment, the law on back pay mirrors the rules on commercial debt, which can be pursued for six years in most of the UK. Today’s announcement smacks of treating workers as second-class citizens, trading commercial debt more favourably than wages.;