SUPREME COURT ISSUES LONG-AWAITED JUDGMENT ON CLAIMS FOR HISTORIC UNDERPAYMENTS OF HOLIDAY PAY

On 4 October 2023 the Supreme Court handed down its long-awaited judgment in the case of Chief Constable of Police Service of Northern Ireland v Agnew & Others, unanimously ruling that employees can claim for historic underpayments of holiday pay, even where there are gaps of more than three months between deductions.

BACKGROUND OF THE CASE

The claimants in the proceedings were a group of 3,380 police constables and 364 civilian employees who worked for the Police Service of Northern Ireland (“PSNI”). The employees claimed that they had been underpaid in respect of payments for holiday pay on the basis that this had been calculated in reference to their basic pay, despite regularly working overtime. Whilst it was agreed by the parties that the workers had been underpaid, the period for which the claimants were entitled to back pay was disputed.

The provisions of the Employment Rights (Northern Ireland) Order 1996 (‘ERO’), which mirror that of the Employment Rights Act 1996, afford workers the right not to have unauthorised deductions made from their ‘wages’, the definition of which also includes holiday pay. The employees sought to rely on the provision within the ERO which would allow them to claim for underpayments arising from a series of payments which had been made, provided that the last underpayment in the series had not been more than three months before the claim was brought in the Tribunal (“the Series Extension”).

The PSNI contended that the police officers could not claim for underpayments in accordance with the ERO on the basis that, under this legislation, they were not considered to be employees or workers. They therefore relied on the Working Time Regulations (Northern Ireland) Order 1996 (“WTR”) which would restrict the period for which the officer could recover underpayments for to three months before the claim was brought in the Tribunal.