Does a gap of more than 3 months in a ‘series’ of unlawful deductions break that series and limit a Claimant to how far back they can claim unpaid holiday?
Contrary to previous UK case law, the answer from the Court of Appeal in Northern Ireland (‘NICA’) in the case of Chief Constable of Northern Ireland Police v Agnew, was no.
In the well-known case of Lock –v- British Gas Trading Ltd, the European Court of Justice (ECJ) held that holiday pay under the Working Time Directive should not be calculated on basic pay alone but should be based on ‘normal pay’, including commission. Workers in Great Britain can claim for underpaid holiday pay under the unlawful deductions from wages jurisdiction in the Employment Rights Act 1996 (ERA 1996), which allows claims to be submitted within three months of the last in a “series of deductions”.
At one stage, it appeared that Claimants may be able to claim very large sums in unpaid holiday pay stretching back historically over many years. However, the decision by the Employment Appeal Tribunal (EAT) in the case of Bear Scotland Ltd –v- Fulton that there will be a break in the chain of any “series of deductions” where a period of more than three months has elapsed between the deductions, limited the scope for workers to bring substantial historical claims for back pay.
Chief Constable of Northern Ireland Police v Agnew
In this recent case, the Claimants argued that Mr Justice Langstaff was wrong in Bear Scotland Ltd v Fulton to decide a gap of more than 3 months between deductions broke a series. Lord Justice Stephens in Agnew, deciding that this could lead to “arbitrary and unfair results”, agreed with the Claimants. He also decided that if there was a “sufficient similarity of subject matter, such that each event is factually linked with the next…in the alleged series…” that would be enough to amount to a ‘series’ of deductions.
This case increases the potential cost of historical holiday pay claims as it confirms that neither a three-month gap, nor a correct payment of holiday pay, will necessarily break a series of deductions. Although not strictly binding in Great Britain, the legislation in Northern Ireland dealing with holiday is very similar to the relevant provisions of the ERA 1996 so if this case is appealed to the Supreme Court, it could provide strong persuasive authority and the outcome could well be binding throughout the whole United Kingdom.
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