According to Judge Peter Clark in the Employment Appeal Tribunal, in Allen v Murdoch, the statutory disciplinary and dismissal procedures apply to claims for redundancy payments and for pay in lieu of accrued holiday arising on termination and, therefore, there is no need for a grievance to be raised in respect of these matters. This result would have knock-on effects for time limits and would be highly significant for other cases were it not for the fact that the statutory procedures have been abolished.

Nevertheless, the reasoning in this case is worth closer examination. It is based on regulation 6(5) of the Dispute Resolution Regulations which state that the grievance procedures do not apply when the complaint is about having been dismissed. It is easy to see how a claim for a redundancy payment is a complaint about having been dismissed, as is a claim for notice pay, but it is harder to see how this is the case for accrued holiday pay, where surely the complaint is about not having received holiday pay.

This is a straightforward matter of causation, the issue being the reason for which the compensation is being claimed. Notice pay is compensation for having been wrongfully dismissed and redundancy pay is compensation for having been made redundant but holiday pay on termination is compensation for not having been able to take annual leave during the employment, and not for the dismissal itself. This is significant for tax purposes because there is a tax-free allowance of £30,000 for payments resulting from the termination of employment, with the effect that redundancy payments and payments in lieu of notice are often made gross. Some tribunals also award holiday pay gross but it is submitted that this is an error for the reasons stated above. Holiday pay is analogous to wages in that a tribunal can order it to be paid through payroll, with the appropriate deductions made, but cannot order it to be paid directly to an employee without deductions, as this would give the employee a windfall and would provide an incentive not to take any leave, completely contrary to the intention of the Working Time Regulations.