FC Case Feature: Holiday pay/Deductions from wages/Police officers

Caspar Glyn KC considers a Supreme Court decision that a gap of three months in a series of underpayments will not prevent a claim extending to underpayments that occurred before that gap

In Chief Constable of the Police Service of Northern Ireland v Agnew [2023] UKSC 33, the Supreme Court considered the entitlement of police officers and civilian staff in the Police Service of Northern Ireland to recover sums that they were entitled to receive as holiday pay during annual leave. It held, overruling Bear Scotland Ltd v Fulton [2015] ICR 221, that where there is a series of deductions from pay, the extent (going back in time) of that series is not broken merely by a gap of three months or more between deductions. Rather, what constitutes a series is a question of fact that must be answered in light of all relevant circumstances. It further held that, in such a claim, police officers are, in effect, to be treated as if they have the status of workers, allowing them to take advantage of the statutory provisions relating to a series of deductions even though those provisions do not expressly extend to police constables.


The respondents brought claims in the industrial tribunal under articles 45 and 55 Employment Rights (Northern Ireland) Order 1996 (ERO), and also under regulation 30(1)(b) Working Time Regulations (Northern Ireland) 1998 and regulation 43(1)(b) Working Time Regulations (Northern Ireland) 2016 (together the WTRs (NI)), alleging that the calculation of holiday pay by reference to basic salary constituted an underpayment. The provisions in the WTRs (NI) restrict a claimant to recovering sums underpaid in the three months before their claim was brought, whereas under the provisions of the ERO there is a 'series extension' provision which allows a worker to claim underpayments relating to a series of payments extending further back in time than that, provided that the last underpayment in the series was not more than three months before the claim was brought. While the appellants accepted that there had been a failure to pay the respondents the correct amount of holiday pay, they disputed the period for which the respondents are entitled to recover. In addition, although they accepted that the civilian staff respondents have a right to claim under the ERO, they contended that the police officer respondents were unable to do so as this legislation contains no provision providing that the office of constable should be treated as employment under a worker's contract (see Public sector, Q&A here). They argued that the police officer respondents would instead need to rely on the WTRs (NI), which did expressly provide for police constables, and they would therefore be restricted to recovering sums underpaid in the three months before their claims were brought. Both the Industrial Tribunal and the Northern Ireland Court of Appeal (NICA) found that all the respondents, including the police officers, could rely on the ERO series extension and that most if not all the payments were in the series for that purpose. The respondents appealed to the Supreme Court.

Supreme Court decision

The Supreme Court unanimously dismissed the appeal. Lord Kitchin and Lady Rose gave a joint judgment.

Police officers could bring unlawful deduction claims

The court found that it was open to the police officer respondents to rely on the ERO. Although there was not a provision that constables were to be treated as workers in this legislation, the EU principle of equivalence required that national procedural rules applicable to EU rights must not be less favourable than those governing similar domestic actions. As the remedy under the ERO was more advantageous to the respondents, the principle of equivalence was therefore infringed by the inability of claimants under the WTRs (NI) to benefit from the series extension. The NICA had been correct to determine that the objective, purpose and essential characteristics of the ERO and WTRs (NI) were so similar that they should be regarded as similar domestic proceedings and therefore the appropriate remedy was to construe the WTRs (NI) so that they complied with the EU principle. In reaching this conclusion, the Supreme Court clarified that while police officers are not considered workers within the meaning of UK domestic law, they are workers within the meaning of EU law and thus the protections for workers that derive from EU law apply to police officers.

Series of deductions

Turning to the question of whether the NICA had interpreted the series extension too expansively, the Supreme Court found that what constitutes a series is a question of fact that must be answered in light of all relevant circumstances. In Bear Scotland Ltd v Fulton [2015] ICR 221, the EAT had previously concluded that a series required a contiguous sequence of deductions and that a gap of three months or more between deductions would result in the series being broken (see Pay, Q&A here). The Supreme Court disagreed, finding that there was nothing substantive in the legislation to equate this primary limitation period with a restriction or qualification of the meaning of a series of deductions. A series was held not to require a contiguous sequence of deductions and would not necessarily be ended by a gap of more than three months; neither did a correct payment of holiday pay break the series if that correct payment was calculated by reference to basic pay.

Order of taking different types of leave

The court also found that there is no requirement that leave that derives from different sources must be taken in a particular order, which is a further departure from Bear Scotland. Although the relevance of this issue was diminished by the finding that a series of deductions is not ended by being interrupted by a lawful payment, the EAT in Bear Scotland had previously expressed the obiter view that leave deriving from EU rights was to be taken first, and additional leave granted by domestic law should be the last to be agreed upon during a leave year (see Working time & holiday pay, Q&A here). The Supreme Court affirmed the contrary NICA finding that the source of the entitlement to leave has no bearing on the order in which it must be taken. Relevant to this finding was the fact that workers would likely view their leave as a composite whole and it would be impracticable to distinguish between the different types of leave. Furthermore, the EAT in Bear Scotland was wrong in its view that the description of domestic law leave as 'additional' necessarily led to conclusions about when and how it must be taken. The appeal was therefore dismissed in its entirety.


The case is significant in Great Britain mainly because of the reversal of the decision in Bear Scotland, where Langstaff J held that a three-month gap in a holiday pay claim broke the ability of a claimant to daisy-chain back. Langstaff J's decision was, in the author's view, one of pure policy. It is significant in Northern Ireland as it confirms their Court of Appeal's decision. Bear Scotland did not just decide this issue but also what the level of holiday pay was. Langstaff J held that it was pay "which is normally received". Accordingly, at that time, millions of workers had back pay claims. If they could use the series of deductions argument, then those workers could claim for billions going back to the date that the Working Time Regulations 1998 came into force. So the EAT constructed a judgment to prevent those huge back pay claims coalescing, but also to ensure that workers were fairly paid prospectively.

The English Court of Appeal had, obiter, endorsed the Northern Irish Court of Appeal's judgment in Agnew in Smith v Pimlico Plumbers Ltd (No. 2) [2022] EWCA Civ 70, so it was no surprise when the Supreme Court endorsed the rational and logical reasoning of the Northern Ireland Court of Appeal that it depends on all the circumstances and, in this case, where the claims were all for the same failure to pay holiday pay, they were obviously part of a series.­­

In Northern Ireland, the effect of the judgment will be very great indeed. Any Northern Ireland worker will be able (following the English Court of Appeal's approval in Bath Hill Court (Bournemouth) Management Company Ltd v Coletta [2019] EWCA Civ 1707 of the EAT's decision below that the unlawful deduction cause of action provides its own limitation period by the series of deductions provisions) to claim back to when the ERO came into force, 23 November 1998.

However, the effect in Great Britain will not be that great on holiday pay because the coalition Government, with the Liberal Democrat Vince Cable, acted quickly to pass the Deduction from Wages (Limitation) Regulations 2014. That limits all holiday pay unlawful deduction claims to no more than two years back from the date that a claim was presented. Accordingly, workers in Great Britain can only reach back two years for deduction claims. It is something, and makes back pay a little bit more certain, but it is not accurate to report that the effect in Great Britain will be revolutionary, particularly as tribunals were already likely to follow Pimlico.

Another effect of the judgment will be to clarify the effect of limitation in whistleblowing claims, where s 48(3)(a) ERA 1996 uses materially the same language of a 'series of similar acts or failures', so that it is not the time between the series that matters in such a claim but the factual similarity. This will open the door to more claimants relying on historic detriments and linking them to one which is in time.

A final footnote to the judgment is that the principle of equivalence on which the first issue was decided will no longer be a principle of British law after 1 January 2024 as a result of the effects of the Retained EU Law (Revocation and Reform) Act 2023 changes to the European Union (Withdrawal) Act 2018. While the author's view is that, had the decision been made in 2024, the court would have been likely to consider the law as it was prior to 1 January 2024, there is a risk that the court may have considered that, as the principle was no longer part of UK law, it could not rely on it.

First published on the Employment News Service on 5 October 2023.


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