Northern Ireland Court of Appeal dismisses Holiday Pay appeal
In a further milestone for the holiday pay saga, the Northern Ireland Court of Appeal handed down its judgment of the appeal of the Industrial Tribunal decision in Alexander Agnew and Others v Chief Constable for the Police Service of Northern Ireland, effectively dismissing the appeal on all grounds and upholding the Tribunal's decision.
Importantly, the NI Court of Appeal has confirmed the following:
- Workers will be entitled to pursue claims for a shortfall in holiday pay from the date of commencement of the Working Time Regulations (Northern Ireland) 1998 (and subsequent 2016 Regulations) i.e. a 'series of deductions' is not necessarily broken by a gap of three months or more between deductions / underpayments. Instead, identification of the factual link in the alleged series is what determines whether correct payments break the series.
This determination conflicts with the settled principle set out in Bear Scotland Limited v Fulton; the impact of which is that backdated claims alleging a series of deductions are not limited to a series of deductions that have never been broken by a gap of more than three months. This will have significant cost implications for employers across Northern Ireland and those employers based in Great Britain that have employees primarily working in Northern Ireland.
- Workers are entitled to all leave from whichever source (e.g. Working Time Regulations, contract or otherwise) and there is no requirement for certain types of leave to be taken in any particular order. This confirms the approach adopted by the Industrial Tribunal at first instance.
- When considering the appropriate reference period, the NI Court of Appeal re-affirmed that this will be fact sensitive to each case. However, in this particular case, the Court of Appeal deemed the Industrial Tribunal's finding in relation to calculation of the daily rate of overtime using 365 days (by reference to the 12 month reference period) was incorrect. It should instead be decided on a case by case basis in reference to working days, not 365 days in a 12 month period.
The case has been remitted back to the Industrial Tribunal in Belfast for a final determination, particularly in respect of quantum.
We will provide a more detailed note in the coming days, but in the interim, it is clear that this case will have an impact on public and private sector employers across the UK, where they have staff located in Northern Ireland. Furthermore, as this is a Northern Ireland Court of Appeal decision, it will be of increasing note to the courts and tribunals in Great Britain, even if not as yet legally binding in Great Britain.
For further information, please contact a member of the Employment and Benefits (NI) team.
Date published: 17 June 2019