An even scarier liability of £22 million for this year emerges for John Lewis and Waitrose's holiday pay and related costs.
Not all employers are discharging the historic liabilities for holiday pay either because they are not as honourable as John Lewis or they cannot afford the costs.
A 2 year limit on unlawful deduction claims for underpaid holiday pay has been imposed in respect of claims made on or after 1 July 2015 in the Employment Tribunal but also with effect from 8 January 2015 claims cannot be brought in the civil courts based on holiday due under the Working Time Regulations 1998.
One way employers seek to avoid the liability for historic holiday pay is to make a correct payment of holiday pay so as to break the series of deductions. An Employment Tribunal claim has to be brought within 3 months of the last in a series of deductions.
In respect of claims in the civil courts the time limit is 6 years. In many contracts a contractual right is given to holiday pay so in such contracts the civil claim could be made on the contract not on the Regulations.
John Lewis and Waitrose staff are set to share a £22m extra bonus this year after an employment tribunal forced a change in the way all British companies calculate holiday pay. .....about 60,000 workers will share £3m in their February pay packets and John Lewis will take on £7m more in pension liabilities. Workers will then receive a further £12m in additional holiday pay over the year ahead. While the average worker can expect to enjoy an extra £62-£188 in their pay packet relating to holiday pay, the company admitted that workers’ annual profit-related bonus, usually announced in early March, might be lower as a result. The company said it expected the tribunal ruling to result in additional costs of £12m every year.