EMPLOYMENT

Court of Appeal Rules on PSNI 'Holiday Pay' case 

The Court of Appeal recently handed down its landmark judgment in the class action case of the Chief Constable of the PSNI and Northern Ireland Policing Board v Agnew and Others [2019] NICA 32 on Monday 17th June. The Court dismissed the appeal of the PSNI/Policing Board and upheld the prior decision of the Industrial Tribunal, ruling in favour of the group representing more than 3,700 police officers and civilian staff. The PSNI/Policing Board are therefore liable in this instance and could owe up to £40 million in back pay (there are obviously issues as to where the funds will come from to meet such a liability). This is a hugely important decision and will have significant implications for businesses across Northern Ireland.

The PSNI had historically calculated the holiday pay of police officers and civilian staff by reference to basic salary only. However, it is established that in accordance with the Working Time Regulations (NI) 1998, employers are required to calculate holiday pay with reference to “normal pay”. Normal pay includes basic pay and matters such as overtime and allowances over a certain reference period leading up to the holiday.

There are a number of practical issues that employers should be aware of in light of the decision. In summary, these are as follows:

  • The court upheld the view of the Tribunal that the decision in Bear Scotland v Fulton [2015] CMLR 40, was incorrect to find that a gap of three months or more would automatically break a 'series' of deductions for the purposes of a claim for holiday pay. A three month gap could be broken where a factual link between the deductions exists.
  • All holiday leave entitlement should be treated in the same manner, whether that entitlement arises from EC Directive, the Working Time Regulations or the employment contract.
  • The reference period for calculating holiday pay should be assessed on a case-by-case basis, and “be long enough to be representative of the claimant's working pattern."
  • Similarly when working out average holiday pay per day a rigid formula should not be adopted and again a case-by-case approach should be taken.

This ruling gives employees across Northern Ireland the opportunity to pursue holiday back pay claims dating from the introduction of the Working Time Regulations in 1998.

Anyone interested in reading the judgment can access it from the following link

For any queries on the issues raised in this case or any other employment queries please contact the Employment team at MMW.

 

 

 

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