Time limit for unlawful deductions claims starts on deduction date, not termination

News  |   7 August 2024

Written by
James Millican, Trainee Solicitor

In Wharton v Sheehan Haulage & Plant Hire, which sat in the Employment Tribunal (ET) in late June, the Claimant had brought claims for unlawful deductions relating to notice pay and holiday pay. The tribunal held that the relevant time limit ran from the date of termination of his employment. The Claimant had failed to contact ACAS to start early conciliation within three months of the termination date, so his claim was found to be out of time, and the claim was dismissed.

The case was appealed and brought before the Employment Appeal Tribunal (EAT), who set aside the decision made by the ET, and held that the tribunal was wrong to conclude that the Claimant started ACAS early conciliation too late. They determined that in unlawful deductions from wages claims, the three-month time limit runs from the date of deduction, as opposed to the date of termination. The Claimant was paid weekly in arrears, with his last pay date, when the deductions were claimed to have been made, falling nine days after the termination date. ACAS early conciliation had been started within three months of this later date, and the claim form had been provided to the tribunal within the deadline of one month of the ACAS early conciliation certificate being issued. Based on this information, the EAT deemed that the ET was incorrect in assessing that the claim was out of time, and the case was remitted to the ET.

This case highlights the importance of punctuality when commencing ACAS conciliation. If the Claimant had been more punctual, then there would likely have been no jurisdictional dispute on the matter of time limits, which would have saved the Claimant significant time and legal costs. Furthermore, it provides a reminder that even if the termination date for an employee has passed, this does not necessarily mean that limitation in the ET ends three months from this date, and events further to this date can result in an extended limitation.

For further information and advice, please contact us on 020 8290 0440 to speak to a member of our Employment team.

Related Insights