The Northern Ireland Court of Appeal has ruled on whether a series of holiday pay deductions was broken by a three month gap.
Chief Constable of the Police Service of Northern Ireland and another v Agnew and others  NICA 32
A large group of police officers and civilian employees brought claims for unlawful deductions on the grounds that holiday pay had been calculated by reference to normal salary and not including overtime pay. An industrial tribunal upheld the claim, going back to November 1998, when the Working Time (Northern Ireland) Regulations 1998 were implemented. The Chief Constable appealed to the Northern Ireland Court of Appeal.
Northern Ireland Court of Appeal decision
The court declined to follow the EAT’s decision in the case of Bear Scotland Ltd v Fulton and other cases on the meaning of a series of deductions. That decision had the effect of limiting claims for unlawful deductions where there was a break in the chain of a series of deductions of three months or more. In this case, the court decided that under the provisions for unlawful deductions from wages in the applicable Northern Ireland legislation, a series of deductions was not broken by a gap of three months. This meant that the claimants could claim deductions going back to 1998.
In addition, the court held that holiday entitlement under the Working Time Directive (WTD) is not taken first, with additional contractual holiday only taken once the WTD is used up. An individual’s holiday entitlement should instead be considered a “composite whole”, with each day of leave consisting of entitlement from all sources.
As a decision of the Northern Ireland Court of Appeal, this decision is not binding on the Courts and tribunals of England, Scotland and Wales. However, it will have ‘persuasive authority’, which means that tribunals could choose to follow it in future cases. For the time being, it means a divergence in the approach to historical holiday pay cases between Great Britain and Northern Ireland. In addition, there is no equivalent legislation in Northern Ireland to limit the amount of backpay to two years, which applies to claims in Great Britain since 2015.
Subject to any appeal, the case will potentially lead to much higher awards in holiday pay claims in Northern Ireland. We will have to wait for further litigation to arise elsewhere in the UK to see if it has any impact closer to home.
This article is from the July 2019 issue of Employment and Immigration Law Update, our monthly newsletter for HR professionals.