In the case of Chief Constable of the Police Service of Northern Ireland and another v Agnew and others (Northern Ireland)  UKSC 33 the Supreme Court has decided that a gap of three months or a lawful payment does not necessarily break a series of unlawful deductions from wages.
This is contrary to the decision of the EAT in Bear Lock.
Further, the court held that holiday derived from the Working Time Directive (WTD) should be viewed together with the entitlement to holiday under domestic regulations and an individual’s contract as a “composite whole”. This means that the four weeks’ leave under the WTD should no longer be viewed as occurring first in a worker’s holiday year.
The overall holiday entitlement of 5.6 weeks is split into the basic holiday entitlement of four weeks derived from the WTD and an additional 1.6 weeks granted by domestic legislation through the Working Time Regulations (Reg 13A).
Regular overtime payments must be included in the WTD leave of 4 weeks but not in relation to the additional 1.6 weeks which can be calculated based on basic pay.
The court also clarified that what constituted “normal remuneration” was a question of fact and that calculations for what should be included in holiday pay ought to be made using working days in a reference period rather than calendar days. The reference period itself is also a question of fact that should be addressed in evidence by parties to a claim.
Although it originated in Northern Ireland, the Supreme Court judgment is also binding in Great Britain, bringing case law on historic holiday pay claims back into line across the United Kingdom.
It is an important case with significant implications. An employee can claim back pay for two years in Great Britain and much further in Northern Ireland.