12 July 2019 Caroline Jones, Employment tax director
The Northern Ireland Court of Appeal has recently issued a judgment in relation to the calculation of holiday pay entitlement in Chief Constable of the Police Service of Northern Ireland V Agnew and Others.
The judgement challenges the three-month break rule which has been used to limit holiday pay since the Bear Scotland v Fulton decision in late 2014. The case could have major implications for many employers in Northern Ireland dealing with historic holiday pay claims and possibly for employers in the rest of the UK in the future as it also questions the assumption that the four weeks leave under the Working Time Directive (WTD) should be used before any other leave. However, it is likely that the decision will be appealed to the Supreme Court.
Key points raised in the judgement:
The decision is not binding in England, Wales or Scotland. Additionally, in England, Wales and Scotland, there is a two-year cap which applies to any claims made on or after 1 July 2015. This cap means that, even if the judgment was to be applied in an English appeal court, an unlawful deduction claim issued now would still have a cap on it of two years.