CASE UPDATE: Time Limits & Deductions Claims

A recent ruling from the Employment Appeal Tribunal (EAT) has clarified that the three-month time limit for bringing claims related to unlawful wage deductions begins from the date the deduction was made, rather than the termination of employment.

In the case of Wharton v Sheehan Haulage & Plant Hire, the original tribunal dismissed the Claimant's case, concluding it was submitted outside the allowed timeframe. The Claimant argued that wages were improperly deducted from both his notice pay and holiday pay. The tribunal had focused on the employment end date as the start of the time limit and dismissed the claim because the Claimant had not initiated the necessary ACAS early conciliation within three months of that date.

However, the EAT overturned this decision, ruling that the time limit should have commenced from the date the final payment was made – when the deductions actually occurred – which was after the termination of employment. Since the Claimant had begun ACAS early conciliation within three months of that later date, his claim was deemed in time and therefore could proceed.

This case highlights the importance of carefully calculating the deadlines for any claims brought by employees. It is easy to incorrectly focus on the termination date, but for claims regarding unlawful deductions made upon termination, the time limit starts from the date of the last pay, not the employment end date.

If you're unsure how this ruling could affect your business or have any concerns about managing claims from employees, contact our Employment Team today on 01635 896336 or hello@fentonelliott.co.uk.