The Government has published the Deduction from Wages (Limitation) Regulations 2014 (SI 2014/3322) following the furore around holiday pay and overtime and the case Bear Scotland Ltd v Fulton at the end of last year.

The regulations are designed to limit the impact on businesses by imposing a two-year limitation period on most unlawful deductions from wages claims, including claims for holiday pay. The new limitation period will, however, only apply to claims presented on or after 1 July 2015. This means employees and trade unions are free to raise such claims between now and then which may well undermine the new regulations completely?

The regulations also provide that regulation 16 of the Working Time Regulations 1998 does not confer a contractual right to paid leave. This is intended to ensure that, in most cases, workers will not be able to avoid the limitations on wages claims in the tribunal by bringing a breach of contract claim by the back door in the civil courts. This amendment will take effect on 8 January 2015. Again this will not take away any contractual rights to holiday that have already been conferred and therefore will arguably have no impact on existing claims.

Why did the government choose July? Its impact assessment suggests it was trying to balance protecting employers from liabilities but didn’t want to withdraw the employees rights without any notice hence picking a date in the future.