Chief Constable of the Police Service of Northern Ireland and another v Agnew and others [2019] NICA 32

Facts

Over 3,600 police officers and civilian employees brought claims against the Police Service of Northern Ireland for unlawful deductions for underpayment of holiday pay, arguing that their holiday pay should have been calculated by reference to normal pay including overtime.

Decision

The Northern Ireland Court of Appeal made a number of findings:

  • Police officers were not workers under the Employment Rights (Northern Ireland) Order 1996 but the EU principle of equivalence entitled them to bring claims relating to a series of deductions
  • A series of deductions was not broken by a gap of three months or more; lawful payments of the correct amounts between the holiday payments would not interrupt the series. The Court declined to follow the Employment Appeal Tribunal (EAT) in Bear Scotland Ltd v Fulton, where it held that there will be a break in the chain of any series of deductions where a period of more than three months has elapsed between the deductions
  • When annual leave was taken, employees did not use up their Working Time Directive (WTD) leave first. There was no requirement for leave from different sources to be taken in a particular order. The Court again disagreed with the EAT in Bear Scotland, which had held that WTD leave was used first. Days of annual leave formed part of a composite whole and it was not possible to allocate days to particular types of leave
  • A daily rate for overtime should be calculated by dividing the number of working days in the four-week leave period (20) by the number of working days in the 12 month reference period, then multiplying by annual pay
  • Normal pay should be calculated based on average pay over a rolling 12-month reference period immediately preceding the period of leave, although this will be fact-sensitive in each case.

Comment 

This decision substantially increases the cost of holiday pay claims in Northern Ireland, as it means that workers can potentially make claims going back to 1998 when the WTD was implemented (the Regulations that limit back pay to two years for claims brought in Great Britain do not apply in Northern Ireland). As this is a judgment of the Northern Ireland Court of Appeal, it is not binding in England, Scotland and Wales but it could be persuasive if a similar case is brought here. If it is appealed to the Supreme Court, that decision will be binding on the whole of the UK.