Chief Constable of the Police Service of Northern Ireland & Anor v Agnew & Ors (Northern Ireland)

Factual and Procedural Background

The Respondents are members (police officers and civilian staff) of the Police Service of Northern Ireland who, since 23 November 1998, received only basic pay during annual leave. Subsequent European and domestic case-law established that, for the four weeks of leave mandated by the EU Working Time Directives, workers are entitled to their “normal” remuneration, including overtime. The Appellants (treated as the Respondents’ employer) accept historic underpayment but contend that most claims are out of time because the Working Time Regulations (Northern Ireland) (“WTR (NI)”) impose a strict three-month limitation.

The Industrial Tribunal selected lead claimants from 3,380 police officers and 364 civilian employees. On 2 November 2018 the Tribunal held that (i) all claimants could rely on the “series of deductions” provision in the Employment Rights (Northern Ireland) Order 1996 (“ERO”) and (ii) the underpayments formed a qualifying series. The Court of Appeal dismissed the employer’s appeal ([2019] NICA 32). The Appellants then appealed to the Supreme Court, principally on limitation and “series” issues. An intervention was lodged by the trade union “UNISON”.

Legal Issues Presented

1. Whether police officers, as well as civilian staff, may rely on the ERO “series of deductions” extension despite not being “workers” under the ERO definition.
2. Whether, by EU law’s principle of equivalence, the more generous ERO limitation regime must be read into the WTR (NI).
3. The correct interpretation of “series of deductions” in article 55(3) ERO: does a gap of more than three months or an intervening lawful payment break a series?
4. Whether annual leave from different legal sources must be taken in a fixed chronological order.
5. The correct method for calculating holiday pay where overtime forms part of normal remuneration, including choice of divisor and reference period.

Arguments of the Parties

Appellants’ Arguments

• The ERO “series” extension is unavailable to police officers because they are not ERO “workers”; only civilian staff can use it.
• Even if the Tribunal can apply EU principles, importing the ERO time-limit into the WTR (NI) contradicts legislative intent and legal certainty.
• “Series” demands temporal contiguity; any gap exceeding three months or a lawful payment breaks the series and extinguishes jurisdiction.
• Leave derived from the EU Directive must be deemed to be taken first; compliant payments or gaps therefore interrupt any series.
• Using calendar-day divisors (e.g., 365) to calculate daily overtime rates is necessary to avoid over-compensation.

Respondents’ Arguments

• The principle of equivalence requires that claimants enforcing EU rights have procedures no less favourable than comparable domestic claims; therefore the ERO limitation must be read across.
• Police officers are already “workers” for WTR purposes; equivalence imports the same limitation protection without requiring them to fall within the ERO definition.
• “Series” turns on factual links (common calculation error) and is not broken by time gaps or occasional correct payments.
• Workers do not segment their leave; all statutory and contractual leave forms one composite pot.
• Dividing by working-days, not calendar-days, best reflects the purpose of maintaining normal pay during leave; reference periods are questions of fact, usually 12 months.

Table of Precedents Cited

Court's Reasoning and Analysis

Equivalence and Jurisdiction. The Court held that claims under the WTR (NI) and unlawful deduction claims under the ERO are “similar domestic actions” because they pursue the same objective (recovery of underpaid wages) in the same tribunal forum and with materially identical procedural features. Therefore, under the EU principle of equivalence, the more favourable ERO limitation (three months from the last deduction in a series) must also govern WTR holiday-pay proceedings, even for police officers outside the ERO definition of “worker”.

The Court rejected the employer’s argument that the comparability test required the claimant to be eligible under both statutes; such a criterion is not part of CJEU jurisprudence and would undermine equivalence.

Applying Marleasing, words were read into regulation 43(2)(a) WTR (NI) 1998/2016 to incorporate the series extension. This adjustment does not offend legal certainty or the “grain” of the legislation because the WTR already embeds similar protective purposes.

Meaning of “Series of Deductions”. The term bears its ordinary English meaning and is fact-sensitive. Key holdings:

• A series requires a sufficient factual link (e.g., common method of under-calculation), not unbroken temporal contiguity.
• Neither a gap exceeding three months nor an intervening correct payment automatically breaks a series; those factors are relevant but not determinative.
• The Employment Appeal Tribunal’s contrary view in Bear Scotland was wrong.
• Identifying the series involves pinpointing the deductions’ unifying flaw—in this case, using basic rather than normal pay for holiday remuneration.

Order of Leave. There is no legal rule that EU-derived leave must be taken (or deemed taken) before domestic “additional” leave. Workers regard leave as a composite entitlement, and sequencing rules would create arbitrary results and encourage employers to engineer three-month gaps.

Calculation Methodology. Dividing the 20 days’ leave by 365 calendar days is inappropriate where overtime accrues on working days. Determination of divisor and reference period (often 12 months) is fact-specific and for the Tribunal to resolve.

Holding and Implications

HOLDING: Appeal DISMISSED.

Implications:

• Police officers and civilian staff in Northern Ireland may claim historic underpayments back to 23 November 1998 (subject only to factual limits), drastically increasing potential employer liability.
• The Supreme Court overrules Bear Scotland on the “three-month gap” rule, affecting unlawful deduction claims across the UK that fall outside the two-year backstop applicable in Great Britain.
• Tribunals must now apply a purposive, factual approach to “series of deductions”, and employers cannot rely on sporadic correct payments or scheduling tactics to truncate liability.
• No new precedent is set regarding the two-year statutory backstop in Great Britain, but the judgment offers persuasive guidance for interpreting “series” under section 23 ERA.