The Union of Construction, Allied Trades and Technicians (UCATT) has warned that employers may find ways round the European Court of Justice's ruling preventing employers from giving workers extra hourly pay in lieu of annual leave.
The construction industry is badly affected by 'rolled up' holiday pay because of its large number of contractual workers.
Jonathan Green, senior researcher at UCATT, said: "This should be a positive move, as construction employers will no longer be able to pay employees a small amount of extra money to compensate for days off work."
But he added that the court's decision in the case of Caulfield v Hanson Clay Products was confusing because it used the word 'transparently' and implied that employers could continue with the practice of rolled up holiday pay as long as they are clear about what they were doing with employees in the contract of employment.
Phillip Titchmarsh, employment senior associate at Pinsent Masons, believes the ruling is "incredibly complicated" and said that employers and unions should wait for the next stage in the legal process when the case goes to the Court of Appeal.
"It may be prudent to wait and see what the Court of Appeal says on it," he explained.