So there was much excitement in Legal-Island when a couple of weeks ago, spotted on LinkedIn that Agnew has been relisted for Christmas. It's proper employment law geek stuff, but I think the bottom line, Seamus, as we were chatting before, is we need an answer on this.

We were all extremely downhearted when it looked like it was going to settle, which, of course, the parties wanted to settle. Of course, they do. But in the legal world, we want an answer because this mishmash of "taking a bit from here and a bit from there" case law makeup of our holiday pay is just not great at the minute.

So what's all the fuss about Agnew

Seamus: Well, I would assume that most people will have some knowledge in relation to Agnew, and you could fill up a whole session on Agnew, for an hour at least, in relation to it. But the basic position is it is around holiday pay.

Historically, we've had a situation where employees only received their basic salary entitlement on annual leave. And then, since 2011, the case law has really developed. That has come about interpretation through EU law, and then we're down into circumstances with our national laws, and even within that, differences in the jurisdictions here compared to England, and Wales, and Northern Ireland.

So basic position, just to kick it off, is really that we have the Working Time Directive, which is our European legislation. It provides for a minimum of four weeks' holidays a year, 20 days. Then on top of that, we have our Working Time regulations in Northern Ireland, the 2016 regulations, that provide us with the benefit of a further eight days.

And then I'd always flag up the fact that there could be a further enhancement of holiday set out within the contract of employment.

And we were just speaking before we know the issues that there are in relation to shortcomings in recruitment and staff. And at the minute, employers are certainly being pushed to enhance terms and conditions. It may well be that employees are receiving much greater than the standard 28 days' holidays per year or whatever is works out for part-time staff.

So case law, really, we're talking working from the Williams and Others, the British Airways case in 2011, where the ECJ found that holiday entitlement should not be limited to basic salary, but must reflect what was called normal remuneration during the four-week entitlement under the Working Time Directive.

Then we had Lock in 2014, and then importantly, we had the Bear Scotland case in 2014, which is an EAT tribunal decision. And what it said was that non-guarantee . . . This was an overtime case, and what it said was non-guaranteed overtime constituted normal remuneration, and should be taken into account when calculating holiday pay for the purposes of the four weeks under the Working Time Directive.

And then importantly, when we come to Agnew, it said that more than a three-month gap between any alleged underpayments of holiday pay would break any series of deductions for the purposes of an unlawful deduction. And therefore, the extent to which workers commit retrospective claims on holiday pay was limited.

And then what we had happen was after we had the Bear Scotland case, we had the Deduction from Wages (Limitation) Regulations 2014, which was introduced in GB. And it provided for a statutory cap of two years on any back pay for unlawful deduction of wages after 1 July 2015. But importantly, at the time, legislation wasn't extended to Northern Ireland, and we didn't bring anything in specifically in Northern Ireland in relation to it.

Couple of other cases then. We had the Dudley case then in 2016. We had the East of England Ambulance Service against Flowers in 2019. All of these cases were, again, pushing out the process of inclusions of both the enhancements that you might receive during your normal pay to be included within your holiday pay.

And ultimately, where we got to was . . . the effect of it all was that when calculating an employee's entitlement to the four weeks' leave under the Working Time regulations, you were including things like commission, incentive bonuses, overtime pay, productivity performance bonuses, shift allowance and premiums, standby payments for emergency callout duties, and then taxable and other allowances that were treated as tax remuneration.

Christine: It's just so easy, Seamus. Wow. What we've been talking about is transparent.

Seamus: Yeah, and I'm conscious of that as well, that it is complex. There were a few things that were set out that weren't to be included as well, the likes of benefit in kind, bonuses that weren't linked to performance, and expenses for reimbursement of costs incurred, and things like that. They were all retained out of it.

And then we had the Agnew case, and this was an industrial tribunal case in Northern Ireland. It was brought by over 3,500 police and civilian employees and workers within the police. And essentially, what these claims are . . . they were claiming that there was an underpayment in relation to holiday entitlement right back to 1998 whenever the Working Time regulations were first introduced in Northern Ireland.

What the tribunal had upheld essentially, and the interesting legal aspect of it, was that the decision in Bear Scotland was wrong. So the 2014 decision had, in fact, been wrong to find that a gap of three months or more would automatically break a series of deductions for the purposes of a holiday pay claim.

And essentially, what the tribunal said at that point was that if there was a claim for holiday pay, that it could go right way back to 1998, which produces scary types of figures, absolutely, for anybody that would be claiming holiday pay.

So a lot of the advice in and around this time from the practitioners was organisations/employers need to get their ducks in a row. You need to start looking at what the potential liability is here. And you need to be making steps in order to resolve the position going forward. So get your ducks in a row as regards to proper payment of holiday entitlement going forward.

And then looking at the retrospective payments, there's the potential of a wave of litigation arising from that, which has happened. We know that our employment tribunals in Northern Ireland here are overloaded with holiday pay claims, and they've been sitting stagnant, because the next stage that happened after that was then that we had the higher Court of Appeal decision in 2019.

And not only did the Court of Appeal decision in 2019 uphold our original tribunal decision, it actually went slightly further. And some key findings from that said that . . . What Court of Appeal held was that a series of deductions is not ended as a matter of law by a gap of more than three months between unlawful deductions, nor is it ended by a lawful payment. So if, all of a sudden, you got it right and started to pay the correct, that didn't mean that you couldn't . . .

Christine:  Yeah. You're still stuck with the bill.

Seamus: And what the Court of Appeal said was that to hold that would lead to arbitrary and unfair results. And instead, it said that the identification of the factual link in an alleged series of deductions is what determined whether correct payments of holiday pay breaks the series or not.

And so you're left with a position here where we have an originating decision in our tribunals which goes against the Bear Scotland decision, and we also have our Court of Appeal decision which opposed the original tribunal decision here as well.

Christine: So as it stands, Seamus, people obviously need to look at their holiday pay, get some advice on what needs to be included in it, and get it right, but they also need to be braced for back payments. Is that where we are as of today without a decision in Agnew?

Seamus: Absolutely. Yes. And the advices have really been at the time to, if you haven't really done so, you should take immediate steps to ensure that going forward, holiday pay is calculated on the basis of normal remuneration for four weeks of each year of annual leave.

And also calculate potential liability for back pay, and consider whether there's any action appropriate to risk reduce extensive back pay claims, i.e. the potential that you could negotiate with your employees and get agreement. And maybe you use the facilities of the Labour Relations Agency in order to use that support and have claims settled and resolved.

Christine: Sorry, Seamus. Just to clarify as well, it's just the four weeks EU leave, for want of a better phrase, that this is about. The extra leave that the UK decided workers should have is not applicable here. It's just the four weeks.

Seamus: That's right, in terms of what we get under the Working Time regulations. But it isn't the simple scenario whereby you can just say it's the first four weeks that apply to that scenario either.

Christine: Of course not.

Seamus: It is complex and it is complicated. So the advice was always, "Don't delay in relation to that. Put your ducks in a row now and get prepared for it because it's going to come".

And then we have a situation really, Christine, that has happened that we have a number of cases that have been brought. I think that it's in the thousands that these cases have been brought in the tribunal. And those cases have all been stayed and postponed while we await the outcome of the Supreme Court decision.

Now, I have a number of them in the office here as well. And I'm keen, obviously, to get those moved on and try to get some resolution and get them completed.

So we've had a number of . . . I mean, certainly through case management discussions, I have other cases that sit outside of the holiday pay claims that are also awaiting a clear decision from the Agnew case, too.

So I think the case was originally due to be heard around maybe Easter time last year. Then there were discussions that were on-going, and we were aware that there were negotiations in place. There seemed to have been a breakdown in those negotiations. And then there was a second attempt, I think, to renegotiate maybe coming up towards October time last year.

And now we've got an understanding whereby those negotiations haven't been fruitful and the case has now been relisted again for December 2022. And I think that that's a positive step in the sense that it's a timeframe in place. If they can resolve it, they can resolve it.

The mutterings that I've heard is that the case is not going to be resolvable, and that it will run in December 2022. And you would hope then that we'll get a clear decision.

It's an opportunity for the Supreme Court as well to give clarity around these issues. There have been a number of attempts to get cases in, and they have resolved, because everybody is so unsure and unclear. And there is such a significant outcome that can arise from the decision, also. So it would be good to get clarity.

And I think from an employment aspect, absolutely from a legal perspective, it'd be great to get some clarity from the Supreme Court that would take us to a case where we're very clear about what the position is in holiday pay.

At the minute, you've jurisdictional issues and everything else arising as well. We're now out of the EU. We're still working off EU legislation. And then we have these internal issues arising as well, where you have conflicting decisions that have been issued by the courts within the UK as well.

Christine:  Brilliant, Seamus. I've got a few questions, as you can imagine, coming in from the audience here. So somebody very sensibly asked, "Is there any guidance on the composite approach to take?" I think we all wish there was, but I don't think there is one document that tells you, "Do A, B, and C", is there?

Seamus: Not so far as I'm aware. I mean, the Labour Relations Agency may have some helpful guidance there.

 I know that this is always a difficult one because I would have clients that would approach me with ACAS guidance as well in relation to holiday pay, and they're saying, "Well, look, there's maybe a better, clearer position in England than what there is specifically in Northern Ireland". Very difficult for employers that are English-based, but maybe have branches and offices in Northern Ireland as well.

But the Labour Relations Agency does provide guidance in relational holiday pay, and I think it is subject to clarity coming forward. So that's a good starting point.

Christine: Cathy has just very helpfully dropped into the questions a useful link to the LRA there. So thank you very much for that, Cathy. Everyone, check that out.

 Let's see the next question. Can an ex-employee potentially make a claim for back dated holiday pay, or are we only dealing with our current staff?

Seamus: No. The potential is former employees as well. There is a clear guidance in relation to this. Certainly, you're limited in relation to the tribunal and your three-month time limit in relation to what you would normally be able to claim. But there could also be the potential that people will take an alternative route and go through the County Court in relation to claims for holiday pay as well.

Christine: And what's the time limit on County Court claims?

Seamus: I think for holiday pay claims that are there, you can go back as far as potentially six years in a County Court. But don't forget we also have a position whereby the Court of Appeal have upheld the decision to say that you can move right back through to the introduction of the legislation.So there's no doubt there will be test case standards and issues for the courts and tribunals to address going forward.

Christine: But is it safe to say if somebody left six years ago, left your organisation, they're out of time now? Or is it not safe to say that?

Seamus: I think it would be problematic. I think that you would have time issues in relation to that. But again, I think we have to wait to see how the case law will develop.

Christine: If you think it's that wide open, it's a big old mess. It's all you can really describe it as, a big old mess.

Seamus: That's why I think it would be so helpful to get some clarity coming through from the Supreme Court in relation to the position. I don't think we'll get clarity on every single point, and I still think that we'll be subject to getting determinations from our courts and tribunal here.

Christine: Brilliant. Okay. So if someone is on long-term sick, what holidays are they legally able to carry over in Northern Ireland? Is it the 4 weeks or 5.6 weeks?

Seamus: Well, your holidays continue to accrue obviously while you're on sick leave. And in relation to your holidays that you're carrying over, normally we do limit that to the four weeks under the Working Time Directive.

But again, if your contract provides for enhancements, and depending on the terms of the contract, you could have an entitlement to more than that under the terms of the contract itself.

Christine: So the answer is it depends. You need to go back to your contract and look at that.

So I'm mindful of the time, Seamus. What would your kind of takeaways be on Agnew? I suppose what do you hope is going to happen?

Seamus: Well, I'm hopeful that . . . I mean, it would be good to get clarity in relation to these matters, absolutely. And we still have a bit of time to go now to a hearing in December, and then we have to await the judgement coming from the Supreme Court as well.

I'm not sure whether at this point . . . we did have an exciting time a couple of years ago where the Supreme Court came directly over to Northern Ireland to deal with some of our cases here. Don't know whether or not they intend to do that again, or whether it will just be dealt with in London. But you can go on to the Supreme Court website, and you can watch these cases. They broadcast them live whenever they're happening.

So we could still be a period of time away just depending on how quickly they issue the decision, but I do think that there is an acknowledgement that we need a decision sooner or later on this