Backdated holiday pay claims won't cost public purse more than £400m, insists Stephen Farry

Stephen Farry MLA
Stephen Farry MLA
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The potential cost to the Northern Ireland public purse of paying claims for backdated holiday pay will not be more than £400 million, former Stormont minister Stephen Farry has insisted.

Dr Farry, former employment and learning minister, made the claim during an appearance on BBC Radio Ulster's Nolan Show this morning.

The Alliance Party MLA was being quizzed about his decision not to introduce a two-year cap on claims for backdated holiday pay - the same as one implemented in Great Britain which was introduced following the Bear Scotland judgement in 2014, which ruled that normal remuneration paid to workers while on annual leave should include overtime and other regular extra payments.

Following a court ruling last week which could leave the PSNI facing payouts to officers and civilian staff totalling around £40 million, concerns have been raised that thousands of similar claims across the wider public sector, dating back more than 20 years, could total hundreds of millions of pounds.

Mr Nolan said the Northern Ireland Fire and Rescue Service and NI Ambulance Service are still calculating their potential exposure in the wake of the ruling against the PSNI.

He said the Department of Finance and senior civil servants are also still trying to work out how much it might cost Northern Ireland, and he added that he "spoke to one business owner who said this could bankrupt them."

Asked if his decision not to introduce the cap could leave Northern Ireland plc with a bill for more than the £400 million the RHI scandal is expected to cost taxpayers, Dr Farry insisted it would not.

"If you look at the PSNI situation, which was the basis on which you and others made their speculations, the PSNI is a very particular case and is very particularly overtime heavy. That is not the norm elsewhere in the public sector," he said.

Dr Farry claimed it would have been "fairly pointless, futile and counterproductive to proceed with the cap" in August 2015 and would only have led to a huge rush of claims.

He said there was "not a single thing" he could have done or not done in terms of the PSNI case, and described talk of a cap at that time as "a complete and utter red herring."

He insisted that any attempt to introduce a cap at that time would not have got through the Executive, which he claimed was "extremely dysfunctional" and "a transactional clearing house".

Asked would it not have been common sense to discuss the matter with colleagues in the Executive, particularly the then finance minister, before making a decision on the matter, Dr Farry stressed that people in senior HR roles would have been well aware of the Bear Scotland judgement and its potential implications.

Denying a suggestion that he was trying to push blame onto civil servants, Dr Farry said: "This decision was mine. It was my political judgement that I made in the best interests of Northern Ireland and the public interest."

He added: "In terms of my responsibilities, I am happy with the actions which I took. I acted with total integrity and in the public interest in the way I did it."

On the issue of whether or not the PSNI should appeal the case to the UK Supreme Court, Dr Farry said he was sure the PSNI would be assessing last week's judgement and will make a decision on it.

Asked if workers should claim up to 20 years of back holiday pay they were legally entitled to, he said: "I think employers should resolve the issue in terms of their workplaces and come to negotiated settlements with their staff around arrears. Where that doesn't happen I think employees would retain the right to exercise their right to a tribunal."

Responding to the same question later in the programme, UUP leader Robin Swann said: "If people are entitled to it legally at this minute in time. Now I am aware this may be challenged in the Court of Appeal. If it is we will see the outworkings of that. But if they are entitled to it at this minute in time then they are legally entitled to it."

Commenting on Dr Farry’s appearance on the Nolan Show, TUV leader Jim Allister said he should have directly informed the then Department of Finance and Personnel about the potential impact on the block grant of not proceeding with a cap.

Commenting on the Alliance deputy leader's reference to the dysfunctional Executive, Mr Allister added: “Once more the dysfunctionality of our failed system of devolution is set to cost the public dear."