PSNI set to face £40m holiday pay bill

The PSNI and Police Authority are facing a £40million pay out for unpaid holiday leave.

In November, the Tribunal had decided that unlawful deductions from their holiday pay entitlements are in breach of fundamental European law rights.

The decision at that time was estimated to result in a total award of £30million.

The Chief Constable challenged this decision, which today reached the Court of Appeal in Belfast, where the challenge was dismissed, leaving the previous decision standing.

In a further cross-appeal by the claimants, an additional challenge was made on the correct calculation of the holiday pay, arguing that instead of 365 days a year, the calculation should be based on the actual number of working days.

The Court of Appeal upheld this cross-appeal, meaning that the amount of the settlement is now likely to increase by a third, to £40million.

The case was brought by a group of 14 lead claimants representing two groups: police constables and sergeants and civilian support workers, such as forensic staff and crime scene surveyors.

John McShane, Solicitor, with McCartan Turkington Breen (MTB), representing the 9 of the 11 police officers and 2 civilian staff claimants, explained, “The issue in question was whether these groups should have their overtime and other allowances included in the calculation of their “normal” pay, in order to work out their holiday pay entitlements.

“Up until now, holiday pay has been based on working basic contracted hours and has not taken into account the often extensive additional hours required by their work.

“In 2014 a high-profile case in GB determined that pay whilst on annual leave should include an average of overtime and other allowances. Cases were pursued here because the PSNI had not sought to comply with these legal obligations. The cases also addressed to what extent arrears of these unlawful deductions of wages, backdated to 1998 could be claimed. In England and Wales, legislation was introduced to limit any arrears claim to 2 years. No such equivalent legislation was passed by the NI Assembly.”

Delivering the original Industrial Tribunal decision, Employment Judge Kelly outlined that overtime is often a requirement of the role, for example Close Protection officers or Tactical Support or simply by commonplace policing duties.

He said, “Overtime can be required when a shift has to be continued beyond the original rostered finishing time – for example to complete a Road Traffic Accident investigation. It can also be required in particular geographical areas to deal with local problems such as a local paramilitary feud. It varies at different times of the year and in response to different political climates.”

John McShane of MTB Solicitors said, “The Chief Constable’s failure - and continued failure to date - to pay staff in accordance with the legal requirements, resulted in the need for police and civilian staff to incur the cost of pursuing legal proceedings to seek redress for their lawful entitlement to be properly paid whilst on annual leave.”

Judge Kelly said in his decision said that “a failure to provide the right to paid (ie properly and fully paid) annual leave… is an extremely serious matter going to the heart of one of the fundamental rights of the European Union.”

In reaching his decision, Judge Kelly stated, “An employer is not allowed to side step or to avoid the rights guaranteed under a European Community Directive. In the present claims, the position has been clear to all parties since 2014.

"Overtime payments and allowances should have been included, on some basis within the calculation of holiday pay. The present claims appear to highlight a situation where a clear entitlement under the Working Time Directive has been effectively ignored and avoided for a significant period of time and continues to be avoided. It is particularly concerning that this has been done by a public authority.”

Solicitor John McShane continued, “The issue has been complicated by the fact that previous case law decided that a “series” of working hours could be broken by any gap of three months or more, for whatever reason.

"This meant that breaks due to sick leave related to injury at work, cancer treatment or overseas duty for armed forces, and particularly galling, in cases of maternity leave or indeed sickness relating to maternity, would break the series of unlawful deductions and would limit the claim to that break.

"Under the Industrial Tribunal’s ruling, this will no longer be the case. Instead, a recommended period of 12 months will now be used as the baseline for calculating normal working patterns and each case will be considered on an individual basis as necessary.

“This is a landmark decision which will have implications both locally and GB wide and far beyond the police service.”

The Tribunal noted that so far the number of claims exceeds 3,700.

Judge Kelly stated that the exercise of determining each individual case will require “a herculean effort.” Estimates for the total owing by the Police Authority and PSNI are said to be approximately £30million.”

The Court of Appeal dismissed an appeal against a previous tribunal decision on a class action brought by a group representing 3,700 police officers and civilian support staff of the Police Service of Northern Ireland.

PSNI Assistant Chief Constable George Clarke said: "PSNI is seeking further legal advice with regards to the Judgment and will take time to consider it. This will include considering implications of the Judgment and how the costs will be met.

"It would, therefore, be inappropriate to comment further at this time."