Deksne v Ambitions Ltd

The Employment Appeal Tribunal allowed the appeal and held that the Employment Tribunal erred in law in treating earlier underpayments of holiday pay as time‑barred because they were not part of a "series". The Supreme Court decision in Chief Constable of the Police Service of Northern Ireland v Agnew [2023] UKSC 33 was applied: whether deductions form a series is a question of fact determined by all relevant circumstances and is not defeated by gaps of more than three months or by an intervening correct payment. The respondent conceded miscalculation of holiday pay (failure to apply the correct 52‑week average) and the EAT, applying the Jafri v Lincoln College test, substituted a determination that the underpayments from 11 August 2019 to the date of claim formed a series and awarded £496.75 for unlawful deductions under section 23 of the Employment Rights Act 1996.

Background and parties: The appellant, Ms A Deksne, claimed unlawful deductions from wages consisting of underpaid holiday pay, and also raised claims for unfair dismissal and breaches of the requirements for itemised payslips; those latter claims were struck out by the Employment Tribunal and are not before the EAT on this appeal. The respondent, Ambitions Ltd, employed the claimant from 2017 and accepted that it had miscalculated holiday pay by incorrectly including weeks in which the claimant did not work rather than using the correct 52‑week average.

Procedural posture: The appeal is from an Employment Tribunal sitting at Cambridge whose judgment sent to the parties on 12 June 2022 dismissed or struck out parts of the claimant's holiday pay claims as being out of time, on the basis that gaps of more than three months prevented earlier underpayments forming a series. Permission for limited grounds was given by Judge Keith by order dated 15 November 2023, allowing the ground that the Tribunal had erred in law by following Bear Scotland v Fulton rather than the Supreme Court decision in Agnew.

Nature of claim and relief sought: The primary relief sought was a declaration and payment for unlawful deductions from wages under section 23 of the Employment Rights Act 1996, representing underpaid holiday pay going back to August 2019 (subject to the two‑year backstop in section 23(4A)).

Issues framed by the EAT:

• whether the Tribunal erred in law in finding earlier underpayments were not part of a "series" and therefore out of time;
• whether, on the Tribunal's findings and the respondent's concession, the underpayments were linked by a common calculation error so as to form a series under Agnew;
• whether the Employment Appeal Tribunal could substitute a decision on the amount of the deductions or whether the matter should be remitted to the Tribunal (the Jafri v Lincoln College test).

Reasoning and decision: The EAT applied Agnew and held that whether deductions form a series is a fact‑sensitive inquiry, not defeated by intervals exceeding three months or by an intervening correct payment. The respondent accepted that the Tribunal had misdirected itself and that the underpayments arose from the same calculation error. Applying the Jafri test, the EAT concluded there was only one possible conclusion from the Tribunal's own findings and the accepted spreadsheet calculations: the underpayments from 11 August 2019 fell within the two‑year backstop and formed a series of unlawful deductions. The EAT therefore substituted a judgment that the claim under section 23 ERA 1996 was well founded and that the total unlawful deduction was £496.75, ordering payment of that sum. The EAT noted that substitution is a rare remedy but appropriate where only one conclusion is possible on corrected law and the existing findings of fact.

Appeal allowed. The Employment Tribunal had erred in law by treating earlier holiday pay shortfalls as out of time because they were not part of a "series"; applying the Supreme Court decision in Agnew, the Employment Appeal Tribunal held that the underpayments linked by the same calculation error formed a series back to 11 August 2019 and, applying the Jafri v Lincoln College test, substituted a judgment that the claim under section 23 ERA 1996 was well founded and amounted to £496.75, which the respondent was ordered to pay.

Appeal from an Employment Tribunal (Cambridge) judgment sent to the parties on 12 June 2022. Permission to advance one ground of appeal was given by Judge Keith by order dated 15 November 2023. The Employment Appeal Tribunal allowed the appeal in this judgment [2024] EAT 171.