Important new Regulations (The Deduction from Wages (Limitation) Regulations 2014) have been made and will come into force on 8 January 2015. The Regulations, which are designed to limit the impact on businesses of the recent decision in Bear Scotland Ltd v Fulton impose a two-year limitation period on most unlawful deductions from wages claims, including claims for holiday pay. The new limitation period will apply to claims presented on or after 1 July 2015.

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 employment tribunals by bringing a breach of contract claim in the civil courts. This amendment will take effect on 8 January 2015.