Can Former Employer Counter-claim

[Binuchander]

I would really appreciate some advice. I left my job earlier in the year and accepted some deductions to my final pay for excess annual leave taken.
Unfortunately my employer underpaid my final wage and over-deducted my pension contributions from my final pay. I have referred the pension contributions issue to the Pensions Ombudsman and made an application within 3 months of my final working day to the employment tribunal. The amount I am claiming in underpaid wages is around £1000. I was a part-time employee and my former-employer has now said that they miscalculated my bank holiday entitlement all the way back to 2013 so they will counter-claim for a sum of approx £12000.

Is it possible the judge could find in their favour on this?

Does Custom and Practice have to apply to all employees or can it be to the individual?

The relevant wording in my contract of employment is:

'You will be entitled to 6 weeks and 2 days annual leave pro rata (which equates to 28 sessions per year in the case of part-time employment) and 8 public/extra statutory holidays or days in lieu with pay each year between your appointment and its’ anniversary date'.

Any advice would be much appreciated - this is totally new territory for me and it is all a bit anxiety inducing!

[ULA]

Firstly they cannot counter claim at the employment tribunal as this court is in respect of employees claiming from their employers. Your employer will have to make a claim at the county court which if they are saying is over £10k will go into what is called the Fast Track with the possibility that the losing party will be subject to paying the legal costs of the winning part.

Has your ex-employer detailed exactly how they have come to this figure and if not that would be the starting point for them to provide that level of detail.

Are they using this as leverage i.e. you drop your unlawful deduction of wages claim and we will not go after you for what we believe is overpaid bank holiday entitlement?

[Binuchander]

Hi ULA

Thank you for getting back to me. It varied a little bit throughout my time with the employer, but I was approximately a 50% WTE employee, so they have assumed that I have been overpaid for 4 days a year and come up with a figure of 'in excess of £12000' as per their latest email. There is nothing more specific within that email than this statement at present.
They haven't specifically said that they are using this as leverage for me to drop my unlawful deduction of wages claim, but I would say that is implied within their email as this information is contained within an email that they sent to me a couple of days ago that began with 'Submission statement to the employment tribunal/ombudsman'.

Having re-read my contract multiple times, I feel the wording within it suggests I am entitled to 8 bank holidays a year anyway so I am not sure why they are raising this.

You will be entitled to 6 weeks and 2 days annual leave pro rata (which equates to 28 sessions per year in the case of part-time employment) and 8 public/extra statutory holidays or days in lieu with pay each year between your appointment and its’ anniversary date'.

I don't think I ever actually got the full 8 bank holidays every year as if the bank holidays didn't fall on my normal working days (bearing in mind that I was part time) then could it actually be that I have a claim against the ex-employer for lieu days not offered/taken?

[ULA]

As a part-time worker you would only be entitled to pro-rata of the 8 bank holidays that we have each year based on the number of hours/days you work per week compared to a full time worker.

How many days/hours was full time compared to your part-time hours?

[Binuchander]

I worked 22.5 hours a week and full-time was 37.5 hours.

Can I ask if custom and practice would apply to this scenario?

my reading of the contract wording is pro-rata holidays AND 8 bank holidays or days in lieu or would a judge not see it that way?

Is it easier for the ex-employer to claim less than £10000 in court?

[ULA]

Unfortunately bank holidays are also pro-rata for part time employees, therefore the calculation of what you are entitled to is based on the fact that a full time employee is paid for 37.5 per week so 7.5 hours per day x 8 bank holiday which equals 60 hours of bank holiday pay.

The calculation on your hours is 22.5 / 37.5 = 0.6 x 60 hours of bank holiday pay equals 36 hours of bank holiday pay in a year or the equivalent time in lieu.

I think you will need to ask the employer how they have broken the figure they have come to down.

If the claim comes under £10k then it goes via small claims and each party is responsible for their own legal costs.

[Binuchander]

Thank you for the advice ULA.
can I ask how many years the employer could go back for - is it 6 years?

[ULA]

The Employment Rights Act 1996 section 14 that covers the right for an employer to recover overpaid salary including holiday pay does not provide a time limit that the employer can go back. I have seen some non-legal forums in the past state 6 years but I cannot confirm that.

You may be able to argue that you have a defence due to the principle of "estoppel", if your employer seeks to recover the overpayment. The defence is made on the basis that you have changed your position, and spent it since you had a genuine believe the payment was made correctly and that it would be unfair to require you to repay the sum.

[des8]

Regarding recovery of overpaid salary my understanding is that section 5 of the Limitation Act 1980 applies.

This states : “An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued”..
Regarding overpayment wages, the action is founded on the contract of employment, so the six-year limitation period will apply.


Sec 14 of the Employments rights Act applies to deductions the employer can make from a workers wages.
As Binuchander is no longer an employee that section won't apply.

[Binuchander]

Thank you ULA and DES8 - the advice is much appreciated.
I have gone back through my emails today and found one from 2020 written by an HR manager. I emailed querying my annual and study leave entitlement as I was aware other people in a similar role at the company were getting paid study leave allocation and I was not, but in lieu of that - I was getting all 8 annual bank holidays a year. The manger wrote back saying ‘You get all 8 days bank holidays. I have added 1 day to your entitlement as all of the others fall on a Monday or Tuesday and so you will get these anyway’.
Do you think this will be an adequate defence if they make a claim?

[Binuchander]

Please could I ask a question about preparation of documents for my claim of unlawful deduction of wages. I have a letter from the employment tribunal dated 25th August 2023 advising the respondent of a notice of claim and advising them that their response form must be received by the tribunal office by 22nd September.

Within the Notice of hearing and case management orders, it states:

The claimant must by 4 weeks from the date of this letter send to the respondent:

- a document setting out how much he/she is claiming and how the amount has been calculated
- copies of all supporting documents and evidence

The respondent by 6 weeks from the date of this letter send to the claimant copies of all its relevant documents and evidence


In terms of the ask of the employment tribunal that I supply copies of all supporting documents and evidence by 22nd September, would it be normal practice for me to need to supply this information without having sight of the ET3 form from the respondent?

I am aware of some of the reasons why my employer has withheld these wages including the dispute over pension contributions, which I have referred to the pensions ombudsman. Should I explain this within my witness statement or just state the facts around my dates of employment and what is owed?

Thanks in advance.

[ULA]

If you have received case management orders (CMO) from the Tribunal with dates for providing information, then yes you need to comply with these unless you have a very good reason for not being able to do so and in which case you would need to make an application to the Tribunal.

Regardless of whether or not you have seen the ET3 you should be able to substantiate your claim in terms of the sums you believe were unlawfully deducted from your wages and the documents that support this amount.

Likewise the respondent is being ordered to provide you the evidence they will be relying on to defend the claim.

What type of hearing is the Notice of Hearing referring to?

[Binuchander]

Thanks for the response ULA. The letter I have received just says 'Notice of hearing on 5 January 2024 at 01.15' and then goes on to the Notice of Claim to the respondent. The hearing will be via video link and it states should last about 2 hours. There is nothing mentioned about it being a preliminary or any other type of hearing.
Please can I ask if it would be usual to have a preliminary hearing in relation to what should be a fairly straight forward unlawful deduction of wages claim before the full hearing?

[ULA]

No it would not be unusual for a preliminary hearing (PHR) not the first time I have known of this being required for this type of claim.

[Binuchander]

I have now received my former employers ET3 in relation to my claim of beach of contract leading to unlawful deduction of wages.




Within the ET3 they have stated:




‘As a result of reviewing the respondents pension, tax and pay, it is noticed that she has received extra holiday pay which she is not entitled to. This is in excess of £12400’.




No further workings out are offered and they are trying to claim back to 2011/12 when I first joined the company.




I am slightly concerned as I have found some evidence online indicating that a respondent can counter-claim for breach of contract at an ET.




Within my ET1 I have stated:




My claim is that my employer is in breach of Section 13(1) ERA regarding their deductions to my wages described above and that they are in breach of contract for their actions’.




The issue over holiday pay is in relation to the fact that I was given the full 8 bank holidays a year even though I was part-time. I do however have an email from an HR manager from 2021 confirming my entitlement to the full 8 bank holidays in that year in lieu of not being offered any study leave so will submit that to the court. The email also stated that I would have 1 additional day’s leave added to my entitlement for that year as not all the bank holiday fell on my days of work.




Please can you offer any advice as to how I should respond to this particular allegation in my witness statement due by the end of this week.