Chief Constable of Police Service of Northern Ireland v Agnew – Important update on holiday pay

The decision has finally been given in the Agnew case – it confirms that when deciding whether a series of underpayments of holiday pay is linked, this will be determined on the facts of the case, and it is no longer relevant whether there has been a three-month gap between the underpayments.

Facts of Chief Constable of Police Service of Northern Ireland v Agnew

In this case, over 3,300 police officers and 364 civilian employees brought claims for underpayment of their holiday pay, going back to 1998. It was found that their holiday pay was wrong as it only included basic pay and did not take into account overtime. Their holiday pay should have been calculated based on their ‘normal remuneration’ and in this case, overtime should have been included.

The case was put to the Supreme Court to decide how far back the Claimants were entitled to claim.

Previous decision

Workers have three months from the date that the underpayment of the holiday pay was made to bring a claim. However, workers can claim for underpayments before this if they can show there has been a series of deductions which are linked. The Employment Appeal Tribunal (EAT) had previously held in Bear Scotland v Fulton that if the deductions of holiday pay were more than three months apart, they could not be considered linked in a series and, therefore, they could not claim for this back pay.

Judgment in Agnew

However, in this case, the Supreme Court held that when deciding on a series of deductions: all relevant circumstances must be taken into account, including the deductions’ similarities and differences, their frequency, size and impact, how they came to be made and applied, and what links them together.

The fact that there is a three-month gap between a series of underpayments for holiday pay can no longer be relied upon to break the chain of deductions.

Impact on employers

It is crucial for employers to check that holiday pay is calculated properly, as this case means that workers could claim pay further back than they previously could.

However, the decision has not changed the two-year backstop in place for workers claiming an underpayment in their holiday pay.

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