Holiday Pay Claim Time Limits at Tribunal

Caragh Bailey
13/06/2022
2
5 min read
Holiday Pay Claim Time Limits outlined by Employment Law Friend. Someone holds an egg timer in their palm, while a claimant and their solicitor sit at a meeting table in the background.
First: What are you entitled to?
A full time worker is entitled to 28 days annual leave a year (unless their contract of employment provides them with more). During the first year of employment, the worker is only entitled to the leave they have “earned”.

For example, if a full time worker receives the statutory minimum of 28 days per year, then their annual leave accrues at the rate of just over half a day for every week worked.

Therefore if they wish to receive a weeks paid leave, they must first work enough to “earn” that time off. It is open to an employer to allow a worker to take leave, including paid leave, before they have accrued it.

This is not uncommon in practice, because if an employer wants to recruit someone who has already booked and planned a holiday, then often they will agree to this. Equally it may – although it is unusual – be a term in a contract of employment that you are entitled to this.

The rule that you must work to accrue paid holiday ends after 12 months employment. After that, then you are entitled to your full annual leave immediately, and do not have to wait until you have “earned” it. Of course, you still need to agree the time off with your employer, but your employer cannot insist you accrue it before taking the leave.

Can an employer claim back holiday pay?

If you have taken more annual leave that you have “accrued”, then irrespective of how long you have worked for your employer, they are entitled to take this amount out of your last pay when you leave.

It is therefore possible your final pay will be significantly less than usual. In circumstances where you still “owe” your employer leave, then technically you are required to pay them the extra income back.

In practice few employers bother to enforce this – which they would almost always have to do in the County Court – because it tends to be more expense and work for them than it is worth.

It can still be in your interests to repay it though, if you are thinking about using that employer as a reference for the future, for example.

Can an employer refuse to pay holiday pay?

Subject to the restrictions set out above, an employer cannot refuse to allow a worker or employee to have paid annual leave (although when it is taken needs to be agreed).

The only circumstances in which an employer can refuse this is when the person is self-employed, and therefore not entitled to paid annual leave.

If your employer does not pay for you to have annual leave, or does not allow you to take annual leave at all (including being allowed some, but not all, of your legal entitlement), then you can bring a claim in an employment tribunal for unpaid holiday pay.

You can do this whilst you are still employed, or after you have left, although you would usually need to do so within three months of not being allowed to take leave, or it not being paid.

How far back can you claim holiday pay?

If your employer agrees that you are entitled to paid annual leave (and therefore accepts you are not self-employed), then you are only entitled to claim back the financial equivalent of whatever annual leave you did not receive in the last two years.

If you have significant sums owed from before then, then sadly there is nothing that you can do to claim this money.

There is a further restriction in that not only the claim itself has to be made no more than three months after the last time you are owed holiday pay, but there must be no more than a three month gap between this and any previous periods you are claiming for.

For example, if your employer owes you holiday pay from two months before you put in a claim, then you can claim for that.

If the next period that you are owed money for is eight months ago, or six months before the last one, then you are not entitled to claim this, or anything prior to this.

In practice these restrictions can make many such claims of very low value and many will therefore decide not to pursue them.

If however your employer did not allow you to take your annual leave entitlement at all, or allowed it but did not pay you for it (typically because they wrongly described you as self-employed), then there is no limit on how far back a claim can be, and you can potentially claim for many years of unpaid holiday pay.

It is still important to start the claim within three months of your employment finishing, but there is no requirement that every previous period can have no more than a three month gap.


Are you owed holiday pay?
Get in touch as soon as possible, so we can help you meet your holiday pay claim time limit

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This content is provided free of charge for information purposes only. It does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of our company. For employment law advice please get in contact and speak to your employment law solicitors.
 
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