Sleep-in payments and holiday pay: former employee wins £1,704 in unauthorised deductions claim

A case about sleep-in payments and holiday pay

This case shows how employers can get into trouble by not properly calculating holiday pay. The former employee worked for Teen Support Services Ltd from March 2020 to October 2021. She was entitled to sleep-in payments of £37.50 per night, but the employer did not include these in her annual leave pay. When she left, she was also not paid for accrued holiday.

What the tribunal decided

The tribunal found that the employer had made unauthorised deductions from wages. The law requires that holiday pay reflect normal remuneration, which includes regular payments like sleep-in allowances. The employer failed to do this, and also failed to pay the claimant for two weeks of accrued holiday she had not taken.

However, the unfair dismissal claim failed. The claimant did not have two years' continuous service (she worked from March 2020 to October 2021, just over 18 months), so she could not bring a claim for unfair dismissal. The tribunal also noted that the dismissal was for conduct and the employer had followed a reasonable process.

What the employer could have done differently

The employer could have avoided this claim by ensuring that holiday pay included sleep-in payments from the start. They should also have paid accrued holiday on termination. A proper payroll system that accounts for all elements of pay would have prevented this.

Why this matters

This case is a reminder that holiday pay must include regular allowances. Employees who do not receive proper holiday pay can bring claims for unauthorised deductions. It also highlights the importance of the two-year service requirement for unfair dismissal claims – without it, employees cannot challenge the fairness of their dismissal.