The Police Service of Northern Ireland is now facing a £40 million bill after losing a legal battle over holiday pay due to its officers.
In a landmark judgment, the Court of Appeal dismissed Chief Constable George Hamilton’s bid to overturn a finding that his staff and civilian workers should be paid sums dating back two decades.
He was challenging an industrial tribunal decision that their holiday pay had been wrongly based on basic working hours, rather than actual hours worked including overtime.
That determination last November meant nearly 3,750 officers and support staff who took the class action were owed up to £30m.
But appeal judges also held on Monday that holiday pay should be calculated on the basis of actual annual working days, rather than the 365 days divisor favoured by the tribunal.
John McShane of MTB Solicitors, who represented the officers and civilian workers, predicted the overall bill will now rise by around a third. He said: “It’s likely that the consequential value of this case could now exceed £40m in unpaid holiday pay for my clients.”
Claims of unlawful deductions were originally brought to the industrial tribunal by 3,380 police officers and 364 civilian employees.
They launched proceedings against the Chief Constable and the Policing Board following a ruling on UK holiday pay rules in 2014.
In that case judges decided employees who were regularly required to work overtime should get extra holiday pay.
According to the tribunal the failure to provide the correct annual leave entitlements was “extremely serious”.
‘Unjustly enriched’
It raised the prospect of the PSNI and the Police Authority facing an estimated bill of £30m in relation to unlawful deductions stretching back to 1998. But with a dispute over the extent of liability, the case was taken to the Court of Appeal.
It was suggested that the officers can only claim for a period of three months prior to proceedings being commenced.
Lawyers for the group insisted, however, they are entitled to payments from 1998, when the Working Time Regulations were introduced in the UK. They argued that the officers were simply seeking what is owed to them, and that the Chief Constable would be “unjustly enriched” by the denial of all holiday pay due to his staff.
Backing their case, the court held that the PSNI officers are entitled to pursue claims for a shortfall in holiday pay from the commencement of the Working Time Regulations (Northern Ireland) 1998.
Lord Justice Stephens, sitting with Lord Justice Treacy, also allowed the officers' cross-appeal to a finding on how their entitlement should be worked out.
Taking into account overtime and a four-week period of annual leave, the issue was whether the calculation should involve the number of calendar days or working days.
Although the tribunal found that a divisor of 365 should be used, the court overturned that finding. It concluded that what amounted to normal remuneration was a question of fact, just as the applicable reference period was a question of fact.
Dismissing the appeals brought by the Chief Constable and Policing Board, Lord Justice Stephens concluded: “The lead cases should now continue before the tribunal to a final determination.”
Outside court Mr McShane added: "We are delighted for our clients, the judgment vindications the decision of the police officers and NIPSA (Northern Ireland Public Service Alliance) to pursue this case to its conclusion."