Chief Constable of the Police Service of Northern Ireland & Anor v Agnew & Others [2023] UKSC 33

A series of deductions is to be examined factually meaning that where it is linked by a common ‘vice’ or ‘fault’ such as using ‘basic’ rather than ‘normal’ pay then that whole series of underpayments could be claimed.

Background:

The claimants worked for the PSNI mostly as police officers and some as civilian staff. They brought claims before the Industrial Tribunal to recover sums which they should have been paid since November 1998 as part of their holiday pay when they took annual leave. They were not paid these sums as it was thought that the amount payable was related to the basic pay for the weeks they were on holiday. However, subsequent jurisprudence relating to the EU Working Time Directives outlined that it should be the ‘normal’ pay rather than ‘basic’ pay.

The issue arising for the Supreme Court was how far back the employees were entitled to go with their claim in recovering the underpayment. The PSNI relied upon a statutory provision stating that claims can only be made regarding payments in the three months before the claim was brought. The claimants sought to rely upon other statutory provisions which would allow for the series of underpayments to be claimed.

Lord Kitchin and Lady Rose set it out as two issues:

(1)   Whether the claimants can rely on that alternative provision which could allow them to claim underpayments going back further than three months;

(2)   If they can rely upon it, whether the underpayments were part of a ‘series’ within the meaning of that alternative provision.

Outcome:

The NI Industrial Tribunal and the Court of Appeal held that the claimants could rely upon the statutory provision which allows a claim for a series of payments going back further than three months and that most, if not all, of the payments were in a series for that purpose.

The Supreme Court agreed with the decision of the Court of Appeal. To this end, each unlawful deduction in relation to holiday pay was factually linked to its predecessor on the basis that the reasoning was that it was related to basic pay rather than normal pay. This satisfied the issue of whether it was a series which was noted to be a question of fact. The method of calculation was used consistently since November 1998. It did not matter that in some situations there was a time excess of three months between the deductions nor did it matter that some of the payments may have been lawful in that ‘basic’ and ‘normal’ pay may have been the same for some of those holiday payments.

Practical Guidance for Employers:

The Supreme Court set out the financial implications of this case. It is thought that meeting the claims in full (going back to 1998) would cost in the region of £30 million whereas restricting it to three months before proceedings would amount to £300,000. The Court of Appeal decision has been affirmed which provides that the meaning of ‘series’ is factual, and the link is the method of calculation which, by extension, makes the argument about some underpayments having more than three months between them and some payments being lawful, weak ones. Employers ought to be aware of how holiday pay is calculated and this case demonstrates its importance.  It should be noted that a large element of the judgment focused on the ironic ‘backstop’ in Great Britain which restricts such claims to a two-year period but this was never extended to Northern Ireland allowing for claims to go back over a longer period to the promulgation of the Working Time legislation.

Full Supreme Court decision: Chief Constable of the Police Service of Northern Ireland and another (Appellants/Cross-Respondents) v Agnew and others (Respondents/Cross-Appellants) (Northern Ireland) - The Supreme Court