The claimant was employed as a driver/warehouse man with the respondent which engaged in the wholesale distribution of drinks. The claimant had two separate periods of employment with the respondent; the first of which ended amicably when the claimant wished to pursue other employment opportunities. The second period of employment commenced in March 2007. Towards the end of his employment, the claimant unfortunately suffered ill health. This led to the claimant being off from 31st May 2019 as he had been signed off as being unfit for work.

The claimant never returned to work and on 18th September 2019 he resigned, bringing his employment to an end. The issues that arose related to whether payment of sick pay and holiday pay had been made upon termination of employment. The alleged underpayment occurred in the final months of the claimant’s employment.

The respondent stated that pay was paid monthly in advance and the payment made to the Claimant on the 31st May 2019 was an advance payment for the month of June.  Considering that the claimant was only entitled to sick pay for the month of June it meant there was a substantial overpayment. This overpayment was recouped, according to the respondent, by not making any further payments until July.

The issue was whether the claimant was paid in advance or in arrears. If it was in advance, then there would be an overpayment which meant that there would be no outstanding holiday pay.  If it was in arrears, then the claimant would be owed a figure of either £668.92 (according to the respondent) or £804.06 (according to the claimant).

The claimant agreed that the respondent had paid his colleagues in advance.  However, he states that he was paid in arrears considering his return to the company in 2007.  This was because the payments had changed from weekly to monthly.  The claimant also states that he worked for three weeks before receiving his first pay with the suggestion that it meant he was paid in arrears. However, the written statement of main terms and conditions of employment did outline that payment of salary was made in advance.

The Tribunal did find that the claimant held the belief that he was paid in arrears.  However, that does not mean it was well-founded.  As a result, it was found that the claimant was paid in advance.  The claimant ought to have followed up why he had not been paid for the first three weeks of work but that it was likely to merely have been an oversight.  In any event, such a claim would be 14 years out of time. Accordingly, the claimant’s claim for unauthorised deduction from wages relating to holiday pay was dismissed considering that he had been given his pay in advance and the lack of further payments was due to the overpayment.

Practical Lessons

This case demonstrates the subtleties that can arise when it comes to holiday pay (and statutory sick pay) when an individual is signed off. This was further confused by being paid in advance for the work. It was unfortunate that the claimant was not paid for the first three weeks of work but considering that it was back in 2007 there was no claim that could be brought at this stage. It would have been better to have timely communication with the employee when the first payment in advance had been made knowing that he was going to be off sick in the subsequent month.

NI Tribunal decisions are available on the OITFET website:
http://www.employmenttribunalsni.co.uk/