We recently reported on the Employment Appeal Tribunal’s (EAT) important decision on the calculation of holiday pay. This decision established that payments in respect of “non-guaranteed overtime” must be taken into account when calculating an employee’s holiday pay. The financial impact of the decision on employers was limited by the EAT which imposed a three month time limit on bringing a claim for underpayment of holiday pay. However, given the public importance of the matter, the EAT granted the right to appeal to the Court of Appeal in respect of the limitation aspect of the decision.

Unite, the trade union which represented the claimants in these cases, has announced that it will not appeal the decision. This is good news for employers as it means that the three month limitation will remain in force. Prior to this announcement many employers were concerned about the decision being overturned leading to retrospective unlawful deduction claims that might have gone back a number of years. Employers may still wish to identify any employees who are within the three month time period for bringing a claim and once identified these employees should be paid any sums owed which should prevent them from bringing a claim by breaking the chain of underpayments.