The Employment Appeal Tribunal (EAT) has reaffirmed its earlier decision in the case of Fulton and Baxter v Bear Scotland Ltd that a gap of three months or more between two successive alleged under payments or non-payments of wages breaks the chain in a “series” of deductions as set out in the Employment Rights Act 1996. 

Basic facts 

In 2012 and 2013, two claimants – Mr Baxter and Mr Fulton - lodged tribunal claims arguing that the failure to include overtime in their holiday pay constituted unlawful deductions from their wages. The employment tribunal, in a judgement dated 12 June 2013, found that their employer had made certain unauthorised deductions. 

That decision was in turn appealed and the EAT upheld the finding that where there was a gap of more than three months between underpayments, this broke the chain in a “series” of deductions. 

The claims were then remitted back to the tribunal to decide what constituted a series of deductions for the purposes of section 23 Employment Rights Act 1996. 

Relevant law

Section 23 ERA states that a worker can present a complaint to an employment tribunal for unlawful deduction of wages, but it must be brought within three months of the date of payment of wages from which the deduction was made. 

If the complaint refers to a series of deductions, the claim must be brought within three months of the last deduction in the series. 

Tribunal decision 

Bound by the decision of the EAT, the tribunal duly decided that any claims (or parts of claims) where more than three months had elapsed between successive underpayments (or non-payment) of holiday pay were time-barred. It therefore dismissed these claims. 

The claimants appealed, arguing that the passages in the EAT decision relating to “a gap of more than three months” were not binding. Instead it should be interpreted as meaning a strong presumption rather than a universal or “hard and fast” rule that the claims were time barred. This would allow issues to be considered before a decision was reached. 

EAT decision 

The EAT rejected the appeal, however, holding that the claimants were bound by the earlier decision and that the tribunal had no jurisdiction to hear the complaint. 

The EAT also rejected an argument that the earlier decision was inconsistent with the way in which a series had been interpreted in the context of a whistleblowing claim in Arthur v London Eastern Railway on the basis that that case interpreted a different statutory provision which had no bearing on this case. 

The only scope for argument was if the tribunal had incorrectly applied the law to the facts.  That had not happened in this case and so the appeal was dismissed.