LONDON (Reuters) – Thousands of British employers could face compensation claims for underpaid holiday pay after a landmark ruling by the United Kingdom’s Supreme Court, lawyers said on Wednesday.
The decision that over 3,700 Police Service of Northern Ireland (PSNI) employees are owed money for underpayments going back to 1998 “has the potential to cost UK businesses millions of pounds”, said Jo Moseley, from the law firm Irwin Mitchell.
Moseley said the law in Northern Ireland was different to that of the other three nations of the UK, where workers face a two-year limit for claiming unlawful deduction from wages.
“But, even with these restrictions, some employers will still have to pay their staff a substantial amount to settle their cases,” she added.
Nicholas Le Riche, from the law firm BDB Pitmans, said: “Organisations in England, Wales and Scotland will be able to rely on the two-year limit on how far back unlawful deduction from wages claim can go, but even so this decision still has the potential to cost UK businesses millions of pounds.”
The PSNI case began in 2015 when police officers and civilian staff brought claims because their holiday pay was equivalent to their “basic pay”, without reference to the overtime they regularly worked.
The Supreme Court’s ruling on Wednesday leaves the PSNI facing a bill of around 30 million pounds ($36.5 million), but the cost to businesses could be far greater.
Shantha David, head of legal at the trade union Unison, which intervened in the appeal, said: “For years, many workers have been denied unfairly the chance to have their legitimate claims heard.
“This judgment ensures they’ll get all the wages they’re rightfully owed.”
(Reporting by Sam Tobin; Editing by Gareth Jones)