Risk assessment may have averted 'catastrophic' cost to public purse on holiday back pay: Nesbitt

The Ulster Unionist MLA has raised questions around decisions taken by Stephen Farry, the then employment minister, in response to the UK Government imposing a two-year backstop on potential retrospective payments.

In 2015, Alliance MLA Mr Farry made a decision that the same protections would not be put in place in Northern Ireland.

On Wednesday, the Supreme Court ruled that members of the PSNI and civilian staff – and ultimately many thousands of other workers in Northern Ireland – could be owed unpaid holiday entitlement back as far as 1998.

The decision has endorsed the assertion that anyone who worked regular overtime was entitled to an average of their overtime and allowances during their holiday periods.

It is understood that former members of the RUC and PSNI, who had not lodged claims during or immediately following their service, will not be eligible for payments.

Following Wednesday’s court ruling, the Labour Relations Agency said it could prove to be “seismic,” resulting in “eye-watering” amounts being paid right across the public sector.

During an interview on the BBC’s Nolan radio show in 2019 – after Westminster legislated to ensure that only two years of back payments would be allowed – Mr Farry robustly rejected the suggestion that similar legislation should be introduced.in Northern Ireland.

He said was a perception in London that NI ministers were “making things up as we go along,” and added: “The department in London has a poor record in terms of employment law. In Northern Ireland we are the only part of the UK where employment law is devolved… we take our own decision here in Belfast”.

On the same programme on Thursday, UUP MLA Mr Nesbitt said it was noticable that the words “risk assessment” were missing from Mr Farry’s explanation at that time.

In a statement following Thursday’s broadcast, Mr Nesbitt said: “I am struck by the fact that Mr Farry’s statement today is totally different from what he said on BBC Radio Ulster when questioned about this issue in 2019.

"Neither then nor now has he addressed the fundamental question of the apparent lack of a risk assessment of him doing nothing. A basic assessment would have asked two questions (1) what is the likelihood of holiday pay happening and (2) what is the likely impact? The answers were clearly ‘inevitable’ and ‘catastrophic to the public purse’.

Mr Nesbitt said it “is telling that his stance in 2019 was that he knew better than his GB counterparts,” and added: “This back pay is now due to qualifying workers. The Ulster Unionist Party has no issue with that. Our concern is where the money comes from and specifically whether the UK Government will penalise us for failing to introduce a two-year limit as was applied in England.”

However, Mr Farry has defended his position, saying that any comparison with GB was a “red herring”.

The Alliance MP said: “This is a detailed judgement which needs time for consideration.

“Focus has fallen on the absence of a two-year cap or limitation on claims in Northern Ireland, in contrast to Great Britain. This is fundamentally a red-herring to this PSNI case and indeed many other claims in Northern Ireland.

“Within the Deduction of Wages (Limitation) Regulations 2014, which came into effect in Great Britain in early 2015, there was a six-month transitionary period to those regulations in which claims could be made under the pre-existing regime. “In Northern Ireland, the onset of such a cap with a six-month lead in time, and also the associated consultation period preceding it, would have been a major driving force for employees, especially guided by their trade unions, to lodge their claims with the employment tribunal.”

Mr Farry added: “Any cap would have been controversial. It would have amounted to arbitrarily restricting workers from accessing payments which had been illegally deducted. Furthermore, the prospects of any cap being approved by the Executive at that time were extremely low. The trade unions were already strongly opposed to a cap.”