NI changes to recovery of long-standing holiday pay

In the recent decision of Chief Constable of the Police Service of Northern Ireland & PSNI another (Appellants/Cross-Respondents) v Agnew & others (Respondents/Cross-Appellants) (Northern Ireland) [2023] UKSC 33, the Supreme Court have confirmed the rules in relation to the recovery of long-standing holiday pay.

This case involved 3,380 police officers in Northern Ireland and 365 other employees who were underpaid holiday pay since the introduction of the Working Time Regulations 1998 (“WTR”). Their holiday pay had been calculated in reference to their basic pay and had not incorporated any additional pay (bonus and overtime) that they regularly received.

The employees pursued this, and the employer attempted to limit the claims by arguing that they could only claim deductions up to three months prior to the presentation of the complaints to the Tribunal. The Supreme Court have now upheld the original Northern Ireland Court of Appeal judgment and have confirmed that:

• A three-month gap in a series of unlawful deductions will no longer break the chain of a series of deductions.
• A lawful deduction will also not break the chain of a series of deductions.
• Whether a claim in respect of two or more deductions constitutes a claim (in respect of a series of deductions) is a question of fact and all relevant circumstances must be taken in to account.
• There should be no distinction between different types of leave (i.e. the 4 week entitlement from EU law, the additional 1.6 weeks under UK law and any other contractual entitlement) and the entitlement should be considered as one single pot.
• The reference period to be used when calculating holiday pay should be determined as a matter of fact in each case and should be long enough to be representative of the claimant’s working pattern.

The Supreme Court held that the Claimants were entitled to claim their deductions dating back to the introduction of the WTR, at a cost of around £30 million to the Police Service in Northern Ireland. It is important to note that, in Great Britain, there is a two-year limit on how far back workers can claim for a series of deductions.

If you need assistance or a review of how you calculate holiday pay, please do get in touch with the Employment team at EMW.

Read the Judgement here – https://bit.ly/47eOPtw