Chief Constable of the Police Service of Northern Ireland and another v Agnew and others

Workers may claim for a series of unlawful deductions from wages where the deductions are sufficiently linked. Whether deductions form a series is a question of fact assessed in all the circumstances. A gap exceeding three months, or an intervening lawful payment, does not automatically end the series.

The EU principle of equivalence requires the more favourable series extension for unlawful-deduction claims to apply to comparable claims for holiday pay under the Northern Irish working-time legislation. Different sources of annual leave need not be taken in a prescribed order. Where they cannot practicably be distinguished, the entitlements form a composite whole.

The respondents were lead claimants for 3,380 police officers and 364 civilian employees of the Police Service of Northern Ireland. Their holiday pay had been calculated by reference to basic pay, although pay for the four weeks of annual leave derived from EU law should have reflected normal remuneration, including relevant overtime.

The Industrial Tribunal held that all the respondents could use the statutory extension permitting a complaint concerning a series of deductions and that most, if not all, of the underpayments formed such a series: [2018] NIIT 112/16IT. The Court of Appeal dismissed the employers’ appeal on the relevant issues: [2019] NICA 32.

The Supreme Court considered whether the police officers could obtain the benefit of the series extension through the EU principle of equivalence; what constitutes a series; whether gaps exceeding three months or lawful payments break a series; whether different sources of leave must be taken in a particular order; and how normal pay should be calculated.

Appeal dismissed unanimously. Lord Kitchin and Lady Rose delivered the joint judgment, with which Lord Hodge, Lord Briggs and Lord Richards agreed.

1. The claims under regulation 43 of the Working Time Regulations (Northern Ireland) 2016 were comparable to unlawful-deduction claims under article 55 of the Employment Rights (Northern Ireland) Order 1996. Both procedures were informal tribunal proceedings directed to recovering the same holiday-pay shortfall. The fact that a police officer might fall outside the class entitled to sue directly under the Order did not prevent use of that procedure as a comparator. Equivalence requires an objective comparison of the purpose and essential characteristics of the claims.

2. The absence from the working-time regime of the more favourable extension for a series of deductions infringed the EU principle of equivalence. The remedy was to read into regulation 43(2)(a) of the 2016 Regulations, and regulation 30(2)(a) of the predecessor Regulations, wording permitting a complaint within three months of the last payment in a series. That construction accorded with the conforming-interpretation principle and did not contradict a fundamental feature of the legislation.

3. Whether deductions constitute a series is a question of fact. “Series” bears its ordinary meaning of a number of things of a kind following each other in time. The tribunal must consider all relevant circumstances, including the deductions’ similarities and differences, frequency, size and impact; how they were made and applied; and what connects them.

4. A gap exceeding three months does not, as a matter of law, break a series. The three-month limit runs from the last deduction in the series; it does not restrict the meaning of “series”. The contrary reasoning in Bear Scotland Ltd v Fulton was erroneous. Nor does an intervening lawful payment necessarily break a series. Its effect depends on its relationship to the alleged deductions and their underlying cause.

5. The holiday-pay deductions were linked by the common fault of calculating holiday pay by reference to basic rather than normal pay. This remained so despite varying amounts, intervals exceeding three months and occasional lawful holiday payments produced by the same calculation method.

6. Annual leave derived from EU law, additional domestic leave and contractual leave need not be taken in a prescribed sequence. Where the types cannot practicably be distinguished, they form a single composite pot. Normal remuneration and the appropriate reference period are questions of fact. Calculations must compare like with like; working days in the leave period should not routinely be divided by calendar days in the reference period.

1. United Kingdom Supreme Court: Dismissed the appeal unanimously and upheld the Court of Appeal’s conclusions: [2023] UKSC 33.
2. Court of Appeal in Northern Ireland: Dismissed the employers’ appeal on the issues before the Supreme Court: [2019] NICA 32.
3. Industrial Tribunal: Held that all respondents could rely on the series extension and that most, if not all, relevant payments formed a series: [2018] NIIT 112/16IT.