Policy News Journal - 2014-15

there is a real danger of expansive decisions being made by the European Court of Justice on the UK labour market. As part of an EU reform programme, this has to be addressed and it’s time to put a stop to back-door EU employment law being made.” “We need the UK Government to take a strong stand and do all it can to remove this threat. Otherwise we face the very real prospect of successful firms in this country going out of business, with the jobs they provide going too.” For UK businesses, the possible long-term effects are incredibly significant. Commenting, Workplace Law Head of HR, Suzanne McMinn, said: “It really is a significant change for EU employment case law, the basic measure for calculating holiday pay is something that the UK has been using for many years and only now has it been challenged in Tribunal. The outcome will mean for some employer’s huge changes which will be costly and a potential administrative nightmare. For employers looking to acquire new business or expand headcount through TUPE transfers, this is going to be a big consideration for them as to whether this is a viable position for them now. Just when employers have got their financial heads around Pensions Auto Enrolment and the potential additional costs that come with it, they are hit again with backdated holiday pay claims. Employers are going to have to dig deep if they are going to continue with the benefits that employees are currently enjoying and meet the needs of spiralling holiday costs. This could see a big hit on employee benefits and overtime rates as employers try to find the finances to foot the bill. This will impact on businesses’ ability to grow and expand as they had perhaps planned, and the ramifications of this will go well beyond employment issues, with services being hit first as employers try to limit the increasing costs. This also doesn’t sit well for any investors looking at the UK as a possible place to invest in!” The CBI has also stated that the Government must vigorously defend the existing UK law as these rulings go far beyond what could have been foreseen when the working time rules were introduced, and do not respect the EU treaty – which reserves matters of pay to the Member States. Neil Carberry, CBI Director for Employment and Skills, revealed: “We are totally convinced the costs will reach billions and in one sector alone they have estimated £750m. For individual companies it could reach tens of millions.” Describing precisely how substantial this could turn out to be, Carberry went onto say: This is the single biggest employment issue for businesses right now and affects small and medium-sized manufacturers right through to the largest car and engineering plants. It is putting jobs and growth at risk.”

Tribunal considering the interaction of holiday pay and overtime

30 July 2014

A decision may be imminent on whether employers should pay – and should have been paying – workers holiday pay based on their earnings including overtime.

The UK Employment Appeals Tribunal (EAT) is just beginning a three-day hearing representing a significant stage for three cases that will determine the fate of overtime in relation to holiday pay. Lewis Silkin have issued a detailed analysis of the background and the possible outcomes.

Overtime should count in holiday pay

5 November 2014

CIPP Policy News Journal

08/04/2015, Page 89 of 521

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