Deksne v Ambitions Ltd

Whether underpayments form a series of unlawful deductions is a fact-sensitive question. It requires consideration of their similarities, differences, frequency, size, impact, method of calculation and the link between them.

A gap exceeding three months, or an intervening correct payment, does not itself break a series. Holiday-pay underpayments arising from the same erroneous calculation may therefore form one series, subject to the two-year backstop in section 23(4A) of the Employment Rights Act 1996.

The Employment Appeal Tribunal may substitute its own decision only where, after correcting the legal error, a properly directed tribunal could reach only one answer.

The claimant appealed against an Employment Tribunal decision which had dismissed or struck out parts of her claims. The permitted ground concerned holiday-pay underpayments. The Tribunal held that deductions before April 2021 were outside its jurisdiction because gaps of more than three months meant that they could not form a series.

The respondent accepted before the Employment Appeal Tribunal that it had used an incorrect method to calculate holiday pay for a part-time worker with variable hours. It also accepted that, in light of the Supreme Court authority, the earlier underpayments based on that common error formed a series. The issue was whether the case should be remitted or whether the Employment Appeal Tribunal could substitute a decision on liability and amount.

1. Appeal allowed. The Employment Tribunal erred in treating an interval of more than three months as conclusively preventing holiday-pay underpayments from forming a series. Its reliance on Bear Scotland v Fulton was no longer sustainable after Chief Constable of the Police Service of Northern Ireland v Agnew [2023] UKSC 33.

2. Under Agnew, the question whether deductions constitute a series is one of fact in all the circumstances. Relevant matters include the similarities and differences between deductions, their frequency, size and impact, how they were made and applied, and the link between them. A payment interval exceeding three months, and a correct lawful payment, are immaterial if the requisite factual link remains.

3. Here, the respondent accepted that it had consistently calculated the claimant’s holiday pay incorrectly by including weeks in which she had performed no work. The accepted underpayments arose from that same calculation error. The only permissible conclusion was that they formed a series within the Tribunal’s jurisdiction.

4. Applying Jafri v Lincoln College [2014] IRLR 544, substitution was appropriate because there was only one result a properly directed tribunal could reach on the Tribunal’s findings. Subject to the two-year backstop in section 23(4A) of the Employment Rights Act 1996, the recoverable series began on 11 August 2019.

5. The Employment Appeal Tribunal substituted judgment that the claim under section 23 was well founded and ordered the respondent to pay £496.75.

• Employment Appeal Tribunal: Allowed the claimant’s appeal and substituted judgment that the holiday-pay deductions from 11 August 2019 formed a series, that the section 23 claim under the Employment Rights Act 1996 was well founded, and that £496.75 was payable.
• Employment Tribunal, Cambridge: Judgment sent to the parties on 12 June 2022. It held that earlier holiday-pay deductions were out of time because they were not a series, and dismissed or struck out other claims.