Clarifying time limits for unlawful deductions claims: Wharton v Sheehan Haulage & Plant Hire

Charlotte Holman, specialist employment solicitor, takes a look at the recent case law of Wharton v Sheehan Haulage & Plant Hire regarding an unlawful deductions claim.

The recent Employment Appeal Tribunal (the EAT) case of Wharton v Sheehan Haulage & Plant Hire [2024] EAT 127 reiterates the importance of time limits and demonstrates that different time limits can apply depending on the type of claim being brought.

This case clarified that the time limit for unlawful deductions runs from the date of the deduction and not the termination date (which tends to be the relevant date for many types of employment claim when calculating time limits). 

Summary

In this case the Tribunal dismissed the Claimant’s claims for notice pay and holiday pay on the basis that the claim had been presented out of time. The Tribunal considered that the claims should have been presented within three months of the Claimant’s termination date and that the Claimant had failed to start ACAS Early Conciliation within that time frame.

The Claimant appealed the decision and the appeal was heard by the EAT. In its judgment, the EAT concluded that the Tribunal was wrong to find that the Claimant had submitted his claim out of time and that it had used the incorrect date for the purposes of calculating whether the claim was in time.

With claims for unlawful deductions, the three month time limit runs from the date of deduction.

On the facts in this case, the Claimant was paid weekly in arrears and his last pay date occurred nine days after his employment had ended with the Respondent. During that time, the Claimant had started ACAS Early Conciliation which was within three months of his last pay date and he subsequently issued his claim in the Tribunal within one month of ACAS Early Conciliation ending. Accordingly, the EAT set aside the Tribunal’s earlier decision and found the claim had been presented in time. This means the case will be remitted back to the Tribunal for determination.

Key points

• It is important to identify the claims which are being brought as this will dictate the applicable time limits to be complied with.  Whilst for many types of employment claim the termination date will be the ‘key’ date for the purposes of calculating when time begins to run, always bear in mind that there are claims where different dates will apply for the purposes of calculating time limits.

• In an unlawful deduction case, time starts to run from the date of the deduction and not the termination date. In many cases, the last unlawful deduction may take place after the termination date (which was the case here). Therefore, even when the termination date has come and gone, this won’t necessarily mean that time has started to run for the purposes of calculating when a claim will need to be presented by.

If you would like to discuss the issue of unlawful deduction claims, or any other point of employment law, Holmes & Hills have a specialist team on hand to help you.