Her Majesty’s Revenue and Customs v Stringer, Ainsworth and ors
The House of Lords has decided in the long-running case of Her Majesty’s Revenue and Customs v Stringer, Ainsworth and ors that workers who are denied holiday pay can pursue a claim to an employment tribunal for unauthorised deduction from wages under the Employment Rights Act 1996 (ERA).
This follows the decision by the European Court of Justice (ECJ) earlier in the year (weekly LELR 105) that member states can allow workers who are off sick to take annual leave, and can only prevent a worker taking leave while off sick if they ensure that the worker has the right to carry over annual leave to a subsequent leave year if unable to take it because of illness.
Following the ECJ’s decision, the Revenue accepted that a worker’s entitlement to compensation on termination of employment could not be affected by sickness absence. It also accepted that workers on long-term sickness absence and who apply to take annual leave but cannot because they have no right to carry over under the Working Time Regulations (WTR), are entitled to paid annual leave.
The case returned to the House of Lords to decide the issue of whether unpaid annual leave under the WTR and/or a payment on termination could also be pursued as unauthorised deductions of wages claims under the ERA.
The Lords said that it can. The important practical effect is that a worker can take advantage of the more generous time limits which apply to unlawful deduction claims (three months from the last in a series of deductions, allowing claims to go back more than three months if the underpayments form part of a series), as opposed to three months under the WTR.
The successful employees in the case were all members of PCS which provided them with legal assistance throughout the case. It instructed Thompsons to act on behalf of their members.