The long-awaited House of Lords Stringer ruling was supposed to clarify the muddy waters of holiday pay procedure. Instead, it has complicated things still further, leaving employees on long-term sick leave at risk of being 'managed out' by employers worried about costly pay claims (see our front-page story in next week's issue, out on June 16, for full details).
The potential scale of such claims is daunting. The judgement has opened the door for workers on sick leave to claim unpaid holiday pay going back years - in theory to 1998, when the right to statutory paid holiday was introduced.
While already cash-strapped employers - and their HR departments in particular - are understandably keen to keep costs to a minimum, sacking staff on sick leave could have even more expensive legal implications. Lawyers are warning that the ruling has left a worrying number of important questions unanswered, and HR professionals say they have been left "reeling" from the decision and the added financial burden it could impose.
The advice from the legal profession is that employers need to be more proactive about managing workers on long-term sick leave. But they acknowledge that everyone is still somewhat in the dark. The House of Lords did not clarify how employers should actually deal with the holiday entitlement of workers on long-term sick leave, and significantly did not address the issue of workers carrying over unused holiday from one leave year to the next.
This ruling will do nothing to ease the UK's existing estimated £100bn annual sickness absence bill. Further case law is urgently needed before employers can confidently navigate their way around this issue.
