Hi
If it's evidenced clearly that TOIL should be used by a specified time limit, otherwise it will be lost, then legally the employees probably have no valid claim at all.

However, it depends on the extent to which your employer would wish to demotivate them by making them 'lose' all this. It may be that you could kick off with 'they've lost it' contractually but come to some kind of ex gratia payment and / or arrangement at least partially to compensate them. 100 hours apiece is about 13 days off or probably £1000+ in plain time pay, so maybe look at say half of that as a starting point if you want to maintain their goodwill? - and of course reiterate the rules for the future and that this is just a 'one-off' concession that won't be repeated.

I would start in a slightly different place, If you believe their Line Manager (acting on behalf of the company) approved this practice then I think you are duty bound to uphold the TOIL and allow the time off. It is for the Management to ensure managers are aware of policies generally and while ignorance is no defense it is at least a pretty good starting point.

In reply to Keith:

But if the line manager never acually rescinded or amended the general rule, how might they have approved the ignoring of it? Suppose they might have allowed the employees involved to use up time-expired TOIL in contravention of the general rule, but even if so, can't see how this might have worked to nullify it

In reply to David:

We are viewing from different angles I think. Most employees interact with their line managers. They get advice ,guidance and “rule” from their line manger. Clearly a policy may say something but if my manager says this is ok then who am I to question it? So the key for me is do you believe the employees genuinely had this approved by their manager?