EAT re-affirms that three-month gap in series of holiday pay deductions breaks the chain

Published on: 26/05/2017


In Fulton and another v Bear Scotland Ltd (No.2) the EAT confirmed its earlier decision that a gap of more than 3 months in a series of deductions, breaks the chain for the purposes of an unlawful deductions claim, meaning that workers cannot claim for earlier periods.

Following the EAT’s first Judgment on this which had reached the same outcome, Bear Scotland was to be remitted to a tribunal to decide what the claimants were entitled to.  However, the case went back to the EAT as the claimants were not happy with the EAT’s decision. The claimants argued that this aspect of the EAT’s decision did not form part of the main decision; was not binding and also conflicted with other case law. The EAT, second time around disagreed and confirmed the application of the three-month rule.

Employers will be grateful for such clarity, particularly as the passage of holiday pay claims through the tribunal system over the last few years has been turbulent to say the least.  Employers now have the reassurance that workers cannot bring substantial retrospective claims, not least because of the two-year backstop rule but also because of the three-month rule which could operate to significantly  reduce the amount of any claim. 


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