Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Northern IrelandCase lawEmployment lawLatest NewsHolidays and holiday pay

Supreme Court to hear historical holiday underpayments case

by Ashleigh Webber 13 Dec 2022
by Ashleigh Webber 13 Dec 2022 William Barton / Shutterstock.com
William Barton / Shutterstock.com

The Supreme Court is this week set to hear yet another case that could affect how employers calculate holiday pay, and clarify the method for determining whether an employee should receive back pay in cases where there has been a break in underpayments.

In the case of Chief Constable of The Police Service of Northern Ireland and another v Agnew and others, the Supreme Court will decide whether historic holiday pay claims can be brought where there are gaps of three months or more between periods of underpayment.

The hearing will take place on 14-16 December 2022, with a decision expected in 2023.

In England, Scotland and Wales, a claim for holiday pay deductions must be brought within three months of the deduction, or within three months of the last deduction in the case of a series of underpayments. However, the Supreme Court’s ruling has the potential to change that.

In 2019, the Court of Appeal in Northern Ireland (NICA) found staff had not received the holiday pay they had been entitled to for many years. This meant that the Police Service of Northern Ireland (PSNI) could owe back pay of around £30m.

Recent holiday pay rulings

Supreme Court: Holiday pay for part-year staff should not be pro-rated

Pimlico Plumbers holiday pay ruling: four steps for employers

Pimlico Plumbers loses holiday pay appeal in case with ‘huge’ implications

The case was brought by Unison on behalf of a PSNI employee, Mr Agnew, and 3,700 colleagues, following the Employment Appeal Tribunal’s ruling in Bear Scotland v Fulton in 2014. In that case, the EAT found that regular overtime, which employees are obliged to perform if requested by the employer, should be included in holiday pay calculations. PSNI had not been paying employees in this way.

To protect employers from facing claims for back pay potentially going back to 1998, when the Working Time Regulations were introuced, the Bear Scotland judgment said that any such claims would not succeed where there had been a gap of three months or more between holiday underpayments.

To further reduce the impact of the Bear Scotland ruling, the Deduction from Wages (Limitation) Regulations 2014 came into effect in 2015 and introduced a “backstop” period which prevented employees from making unlawful deductions from wages claims, including claims for holiday pay, from more than two years ago. However, this was not introduced in Northern Ireland.

NICA’s judgment said there was nothing in the Employment Rights (Northern Ireland) Order 1996 that set a limit on the length of gaps between unlawful deductions, and concluded that a three month period where the employee had been correctly paid would not break a series of deductions and prevent claims.

It indicated that if the underpayments could be linked, then they could form a series, even if they were more than three months apart.

PSNI disagreed with this and lodged an appeal with the highest court in the UK. If the Supreme Court agrees with NICA’s ruling, many employers across Great Britain and Northern Ireland could face claims for holiday underpayment.

The Supreme Court will also consider whether the respondents have been discriminated against under the European Convention on Human Rghts.

If the Supreme Court opts to follow the reasoning of the Court of Appeal in the Agnew case – which was that any holiday day is a combination of all types of leave – this will create a real practical problem for businesses” – Lesley Rennie, WorkNest

Lesley Rennie, principal employment law solicitor at WorkNest, said the Supreme Court’s recent comments in Smith v Pimlico, gives an indication that it supports Agnew’s view that a series of underpayments is not broken if there are more than three months between them, and that a correct payment does not break the chain.

“If this is the case, an employer’s potential liability for historic underpayments will be greatly increased, although there is generally a two-year limitation on claims in Scotland and England,” she said.

“The second point is whether any given holiday day can be described as being solely Working Time Directive (WTD) leave or solely Working Time Regulation (WTR) leave, or if it is a combination of all leave. If the Supreme Court opts to follow the reasoning of the Court of Appeal in the Agnew case – which was that any holiday day is a combination of all types of leave – this will create a real practical problem for businesses.

“Pay for WTD leave days must reflect normal remuneration so it must take into account things such as commission, allowances and overtime. If we must distinguish between WTD and WTR leave, businesses would need to carry out complex calculations to work out what element of each makes up a holiday day and pay it accordingly or apply a blanket approach of paying all holiday days at the rate of ‘normal remuneration’.”

Rennie said that employers should review their holiday practices now to ensure that WTD leave is paid at normal remuneration going forward and assess whether there have been any underpayments within the last two years.

“Whilst this is a Northern Irish case, the Supreme Court’s decision will be binding throughout the UK. That means that employment tribunals in Scotland and England will have to follow it,” she said.

Latest HR job opportunities on Personnel Today

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.


Browse more human resources jobs

 

Ashleigh Webber

Ashleigh is a former editor of OHW+ and former HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support.

previous post
MAC urges caution over new visa routes, despite worker shortages
next post
Pay settlements at 31-year high

You may also like

Restaurant tips should be included in holiday pay

21 May 2025

Bank holidays: six things employers need to know

2 May 2025

Top 10 HR questions March 2025: Carrying over...

2 Apr 2025

Easter bank holidays: Do you owe staff an...

24 Mar 2025

Top 10 HR questions February 2025: Supporting employees...

4 Mar 2025

Top 10 HR questions January 2025: TUPE employee...

4 Feb 2025

Storm Éowyn: Five common employer queries about severe...

24 Jan 2025

Holiday pay reforms in 2025: what HR needs...

16 Dec 2024

Top 10 HR questions October 2024: National living...

1 Nov 2024

Employment Rights Bill: Fair Work Agency will operate...

10 Oct 2024

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+