Commentary

(d) The two-year cap on back pay

Division BI Pay
| Commentary

(d) The two-year cap on back pay

| Commentary

(d)     The two-year cap on back pay

The Bear Scotland judgment attracted a great deal of media attention and, despite the limits Langstaff P imposed on the scope of a 'series of deductions', the case led to fears amongst employers that it would generate an increase in holiday pay claims. Within hours of the judgment being handed down in early November 2014, Vince Cable, the then Business Secretary, announced the creation of a task force to 'properly understand the financial exposure employers may face from backdated claims.' Soon afterwards an impact assessment was published. This concluded that a two-year cap on some claims for back pay was the preferred option for dealing with the 'uncertainty' created by the decision, as this produced the 'best combination of certainty for all parties and restoring a more appropriate balance on the liabilities businesses could face' [sic]. Accordingly, a few weeks later, the Government enacted the Deduction from Wages (Limitation) Regulations 2014 SI 2014/3322. These regulations, which apply to England and Wales and Scotland only, insert a new s 23(4A) into the ERA 1996, which prevents a tribunal considering 'a complaint… as relates to a deduction' where the date of the alleged deduction falls more than two years before the date of presentation of the claim. There are a number of points to note about the Regulations:

  1.  

    (i)     No formal consultation on the

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