The outcome is mixed for employers. Claimants with long enough service can claim as far back as 23 November 1996, two years earlier than many expected, but on the other hand, interest will not be payable on top and each claimant must prove their own loss. The tribunal has also determined that there is also no single formula for working out what they're owed.
With more than 7,000 claimants now involved, and liability stretching back almost 30 years, the tribunal has also strongly encouraged settlement.
We set out the key takeaways from the judgment below.
Where we were after the Supreme Court judgment in 2023
The claims at the centre of Agnew II date back to 2015, when 3,380 police officers and 364 civilian staff took the PSNI and the Policing Board to the tribunal for unpaid holidays. For years, they’d been paid basic pay while on holiday, which did not take into account regular overtime and allowances. The PSNI accepted that this was unlawful but there was a remaining issue over how far back the claims could go.
The answer came in stages. The tribunal ruled in 2018, the Northern Ireland Court of Appeal in 2019, and the Supreme Court made a final decision in October 2023. It held that police officers could bring a claim for a “series” of deductions, just like other workers. It also held that a gap of three months or more between underpayments doesn’t automatically break that series, opening the door to claims stretching back decades.
The Supreme Court also held that holiday pay must be worked out using working days, not all 365 calendar days, but left the detail of how to work this out to the tribunal. It also left open whether the claims could reach back to 1996, when the Working Time Directive should have been in place, rather than 1998, when they actually came into force in NI.
The parties were left to try to agree the remaining issues, but despite nine case management hearings this did not happen. Ultimately, in this hearing, the tribunal had to decide four questions: how far back the claims go, whether interest is payable, how to value claims where overtime records don’t exist, and which divisor to use.
The hearing took place in June 2026, and the judgment was issued to the parties on 8 October 2026.
What the tribunal has now decided
Holiday pay claims go back to 1996, not 1998
The Working Time Regulations (WTRs) came into force in Northern Ireland on 23 November 1998, but the UK was late in implementing this, as the EU Working Time Directive should have been in place by 23 November 1996.
As the PSNI and the Policing Board are public bodies, they accepted that the claimants could rely directly on the right to paid leave in the Directive itself, because an unimplemented directive can be enforced directly against an ‘emanation of the state’ i.e. public bodies. However, they argued that a claim reaching back to 1996 was a new claim, needing a very late amendment. The tribunal disagreed and confirmed the substance of the claims have always been the same i.e. about underpaid holiday pay, regardless of whether they were relying on the WTRs or the EU Directive. How far back the remedy goes is a matter of legal argument, and claim forms only need to set out the “essence” of the claim, not every legal route to it.
A point worth noting for private sector employers is that the 1996 date rests on the claimants relying directly on the Directive against the state. That route isn't normally open against a private employer, so for most private sector staff 1998 is likely to remain the earliest starting point.
No interest on top of unpaid holiday pay
The claimants sought interest on top of their unpaid holiday, or an inflation uplift, to reflect the years they'd waited for payment. Over three decades, that would have been a significant uplift, but the tribunal disagreed on this point.
The tribunal's power to award extra financial loss in wages claims covers knock on costs such as bank charges, but not interest. Parliament has provided for interest elsewhere, for example in discrimination awards, and the tribunal concluded it would have done so here if it had intended to.
The WTRs also treat two kinds of claim differently. Where a worker is refused leave by their employer, the tribunal can award "just and equitable" compensation, which could include interest. However, where a worker took their leave but was underpaid, they get the shortfall only. These claimants took their leave, so they only get the amount underpaid itself, grossed up for tax and national insurance. The tribunal itself noted that this point may need clarifying on appeal, which seems likely.
Each claimant must prove their own loss
Overtime records only exist from 1 April 2004 for civilian staff and 1 January 2007 for officers, and for the years before that, the claimants wanted a "broad brush" approach applied to everyone, i.e. one estimate applied across the board for all. The tribunal refused on the basis that a ‘one size fits all’ method could over or under compensate people, and might tempt those with good records not to use them.
Claimants can still use sampled or extrapolated data as evidence and the tribunal will decide case by case how much weight it carries. However, while it would not impose a broad brush approach at a hearing, it actively encouraged the parties to agree one, or a sampling approach, as a basis for settlement.
No single divisor
To turn a year's overtime and allowances into holiday pay, we have to divide by a figure that reflects working time. The PSNI argued for 20/240 (20 days’ leave over 240 working days), or 8.33% of annual overtime and allowance earnings. The tribunal declined to apply any single figure to everyone. The right divisor depends on each claimant's working pattern. That said, 20/240 may still be the right answer in some cases.
The position in Great Britain
A reminder that employers in Great Britain have more protection, for now. The Deduction from Wages (Limitation) Regulations 2014 limit unlawful deduction claims brought after 1 July 2015 to the two years before the claim. There's no equivalent in Northern Ireland.
That ‘backstop’ is, however, under pressure. In Afshar & others v Addison Lee Ltd, an employment tribunal found the two-year limit to be unlawful but that decision is under appeal, and as a first instance ruling it doesn't bind other tribunals, so, for now, the backstop remains in place.
What this means for NI employers
For the PSNI, the decision increases both the potential cost and the complexity of the claims. Long-serving claimants can now claim for an additional two years, however, the refusal to award interest will significantly limit the overall value of the claims.
The more significant practical issue is time. If each claimant must prove their own working pattern and divisor, individual hearings will be unavoidable unless the parties agree a method. The tribunal repeated Employment Judge Kelly's earlier observation that, if each claim took two days to hear, a single tribunal would need several decades to deal with them all. Settlement therefore seems a logical route, potentially on the basis of an agreed formula and sampled data.
For other Northern Ireland employers, Agnew II confirms that liability for historic holiday pay is significant and can extend over a long period. Employers who continue to calculate holiday pay at basic rate where staff regularly receive overtime, allowances or commission will see their exposure continue to grow. That exposure may extend back to 1998, or to the start of employment if later.
An appeal on the interest point appears likely, particularly on whether these are underpayment or refusal claims and if the claimants succeed on that point, the value of the claims would increase significantly.
