In an important decision, the Court of Appeal in Bath Hill Court v Coletta has held that, in an unauthorised deduction of wages claim for non payment of the national minimum wage in the ET, there is no backstop on the recovery of deductions, enabling Mr Coletta to claim 15 years’ worth of losses.
The issue for the Court was whether the provisions of s.23 Employment Rights Act 1996, requiring a claim to be presented within 3 months of the last in a series of deductions was an alternative ‘period of limitation’ for the purposes of s.39 Limitation Act 1980. It held that it was, meaning that the other provisions of the 1980 Act (including the standard 6-year limitation periods in respect of claims for contract and statutory torts) were disapplied.
Giving the judgment of the Court, Underhill LJ endorsed a common-sense approach to identifying whether a provision constitutes a period of limitation by focusing on its substance rather than its specific procedural qualities.
As s.23 proscribes a period after which a person with a legal right is unable to assert that right in legal proceedings, that is enough for it to fall within the ambit of s.39. It is not necessary to determine whether s.23 is a kind of limitation period that constitutes a bar on a right or one that constitutes a bar on a remedy. It is also not necessary to identify whether it is a provision creating a jurisdictional bar.
Drawing a parallel between provisions of employment law dealing with series of deductions and the regime surrounding constructive knowledge in personal injury law, the Court also held that a limitation period does not need to make obvious on its face the maximum period in respect of which a remedy may be obtained. In both areas of the law the specifics of limitation are open to disputes of fact and law that will require judicial consideration to determine. That such an approach may create difficulties for respondents faced with claims spanning many years was held to be no reason to go behind clear statutory language.
As a result of its findings the Court upholds the decision of the EAT under which Mr Coletta was held to be entitled to recover arrears of the national minimum wage stretching over the 15 years of his employment.
The claim pre-dates the coming into force of the 2014 Deductions from Wages (Limitation) Regulations, which subsequently implemented a backstop of two years on recovery for deductions. The Court’s decision is of importance to historic underpayment cases such as sleeping in and holiday pay cases. It also may raise questions as to the potential for challenging the Regulations.
Betsan Criddle and Ben Jones represented Mr Coletta in the Court of Appeal, instructed by Advocate with assistance from Clive Dobbin and Andrew Willshire at Paris Smith LLP. Betsan Criddle also represented Mr Coletta in the EAT below.
To view the full judgment, please click here.
William Meade (Senior Clerk)