J Wharton v Sheehan Haulage and Plant Hire Ltd

Where a claim for notice pay or accrued holiday pay is properly advanced as an unlawful deduction from wages, the limitation period runs from the relevant wage payment, not necessarily from termination of employment. Under section 13(3) of the Employment Rights Act 1996, an alleged shortfall in a payment is treated as a deduction made on the occasion of that payment. Section 23(2) therefore makes time run from that payment date. A tribunal considering a final jurisdictional dismissal must address that available characterisation of an unrepresented claimant’s claim. Timely ACAS early conciliation may preserve the claim under section 207B.

The claimant sought notice pay and outstanding holiday pay following the end of his employment. He presented his Employment Tribunal claim on 5 February 2021. The respondent’s final payment, including payment for accrued holiday, was made on 18 September 2020.

The Employment Tribunal held that both claims were out of time because it treated the three-month period as running from termination on 9 September 2020. The claimant appealed, contending that the claims were for unlawful deductions from wages and that time ran from the final payment date. He had contacted ACAS on 16 December 2020 and received an early conciliation certificate on 6 January 2021.

The central issue was whether the Tribunal had applied the correct limitation date.

1. Appeal allowed. The Employment Tribunal erred in treating termination of employment as the date from which time ran. Its finding that the claim was late was set aside and replaced with a finding that it was presented in time.

2. The claim form, although not express in its legal label, was capable of advancing unlawful-deduction claims under Part II of the Employment Rights Act 1996. That route was available both for alleged unpaid notice monies and for an alleged shortfall in accrued holiday pay due on termination under the Working Time Regulations 1998. Before dismissing an absent, unrepresented claimant’s claim for want of jurisdiction, the Tribunal should have addressed that available characterisation and its effect on limitation.

3. Where a single payment is made but is said to contain a shortfall, section 13(3) treats the deficiency as a deduction from wages made on that occasion. Under section 23(2), the three-month period therefore begins on the date of that payment. The parties agreed that the final payment was made on 18 September 2020. Time consequently ran from that date for the holiday-pay claim and, because wages were paid on that occasion, also for the notice-pay claim.

4. In any event, if the notice claim were analysed as complete non-payment, the notice money could not have fallen due before 18 September 2020 because wages were paid weekly in arrears. That alternative analysis produced the same limitation date.

5. The claimant contacted ACAS within three months of 18 September 2020. The early-conciliation provisions in section 207B applied, and the claim lodged on 5 February 2021, within one month of receipt of the certificate, was timely. The claim was remitted to the Employment Tribunal to determine whether any sums were due.

• Employment Appeal Tribunal: Allowed the appeal in [2024] EAT 127, set aside the finding that the claim was out of time, substituted a finding that it was in time, and remitted the claim.
• Employment Tribunal, Reading: On 3 March 2022, dismissed the notice-pay and holiday-pay claims for want of jurisdiction, holding that they had been presented out of time.