In October 2023, the UK Supreme Court delivered its eagerly-awaited decision in the case of Chief Constable of the Police Service of Northern Ireland v Agnew [2023]. The UK Supreme Court unanimously upheld the decision of the NI Court of Appeal (and that of the NI Industrial Tribunal in the first instance) that police and civilian officers were entitled to underpayments of holiday pay dating back up to 20 years.

The appeal centred on the claims of 3,380 police constables and 364 civilian employees of the PSNI, who argued that they had been underpaid for their annual leave, which had only been calculated to their basic pay despite regularly working overtime. The PSNI accepted that there had been underpayments of holiday pay but argued against the timeframe in which employees could seek recovery for payments under the decision made in Bear Scotland [2014]. In this case, the Employment Appeal Tribunal in Great Britain concluded that a series of unlawful deductions in holiday pay would be broken by a gap of three or more months between the unlawful deductions.

However, in Agnew,the UKSC concluded that a series of incorrect holiday payments is not necessarily ended by a gap of three months or more.

As a result of this decision, employees who can successfully demonstrate that they have been underpaid for their holidays are now entitled to claim for any underpayments made as far back as the later of (a) their start date of employment or (b) 1998, being the date that the Working Time Regulations (Northern Ireland) 1998 were first introduced. This is because the statutory two-year back stop for claims which is applicable in Great Britain has not been implemented in Northern Ireland to date. As a result of this, the financial consequences and exposure for potential claims will be greatest for employers with employees based in Northern Ireland as the courts and tribunals can potentially look back retrospectively for many years. 

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HR Toolkit | eLearning Course

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