Supreme Court Ruling on The PSNI v. Agnew and others: Implications for Employers

Chief Constable of The Police Service of Northern Ireland (PSNI) and another v. Agnew and others.

In 2019, in Chief Constable of The Police Service of Northern Ireland (PSNI) and another v. Agnew and Others, the Court of Appeal in Northern Ireland (NICA) determined that PSNI staff had not been receiving their full holiday pay entitlement over a substantial period. Claims were taken on the basis that failure to include overtime in holiday pay constituted an unlawful deduction from wages contrary to Part IV of the Employment Rights (Northern Ireland) Order 1996.

This claim had been brought forward following the Employment Appeal Tribunal’s (EAT) ruling in Bear Scotland v. Fulton (2014). The EAT decision outlined that if employees were required to carry out regular overtime by their employers, that this should be included within their holiday pay calculations and that such claims could be taken as an unlawful deduction from wages.

The EAT ruled that any claims of this nature would not succeed where there had been a gap of three months or more between holiday underpayments. The Deduction from Wages (Limitation) Regulations 2014 were introduced in England, Scotland and Wales which limited compensation for such claims to a period not exceeding two years. However, this legislation was not introduced in Northern Ireland.

The NICA’s ruling in The PSNI and another v. Agnew and others, found that that the three-month gap between holiday underpayments would not break the series of deductions if such underpayments could be linked.

The PSNI appealed to the Supreme Court on this matter and the hearing took place between 14th and 16th December 2022. The Supreme Court has dismissed the appeal by the PSNI ruling that a gap of more than three months between deductions does not necessarily bring a series of deductions to an end and a correct payment of holiday pay does not break a series if it was calculated with reference to basic pay.

What does this mean for employers across Great Britain and Northern Ireland?

The decision made by the Supreme Court today means that employers across Great Britain and Northern Ireland could face claims in relation to holiday underpayment, which in the case of Northern Ireland could potentially go back several years. In addition to the financial burden this may place on employers, there could also be negative implications for employee relations as cases relating to holiday underpayment emerge.

How can Think People help?

As such cases arise, organisations operating across Great Britain and Northern Ireland may need help reviewing their payroll records and holiday pay policies. At Think People, we can help businesses to manage these processes and ensure that their holiday policies comply with the recent Supreme Court ruling. We can further help to mitigate any breakdown in employee relations as a result of holiday underpayment claims. If you would like any further information regarding our services, please don’t hesitate to contact our Belfast office at 028903 10450.