Holiday Pay Ruling

Advice  |   9 October 2023

Written by
James Millican, Paralegal

Following a landmark case for employment law, the Supreme Court has held in Chief Constable of Police Service of Northern Ireland v Agnew that employees can claim for historic underpayments, even with a gap of more than three months between deductions.

The Claimants involved in the case were made up of civilian staff operating with the police, and officers in Northern Ireland. They brought claims for underpayment of holiday pay after having historically received basic pay during periods of annual leave.

More broadly, the case has established the EU principle of equivalence between the European Union's Working Time Directive, and the Employment Rights (Northern Ireland) Order 1996 (ERO), equating the claimants’ rights to those of a “worker” under ERO, despite them not typically falling into this category. This mandated that holiday pay should encompass these workers’ "normal remuneration," including various elements of pay and allowances. The court's decision clarified that such additional payments, like overtime, should be considered in calculating holiday pay, ensuring fairness and compliance with EU law, and setting a precedent for future cases on this matter.

In addition, prior to the case, claims could only be made within three months before the claim was brought, unless the deduction was part of a series in which there was less than three months between instances. The definition of what a “series” was under ERO has now been expanded upon, as all relevant circumstances must be considered, including the deductions’ similarities and differences, their frequency, size, and impact, how they came to be made and applied, and what links them together. Due to all these underpayments coming from the common error of miscalculated through reference to basic pay, this was deemed enough of a similarity to deem the cases a “series”, establishing a new precedent.

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This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

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