British workers could face fewer holiday breaks and less holiday pay as a result of the vote to leave the European Union, new research by the House of Commons Library has found.
This is despite the fact that the Prime Minister has promised that the government will “protect and enhance” workers’ rights, and that Leave campaign ministers pledged that Brexit would not impact on workers’ rights.
Rights such as continuing to be paid while on holiday, taking regular overtime into account when calculating holiday pay, and being paid in lieu of holiday not taken due to sickness, were delivered by judgments of EU courts and could be challenged in British courts after Brexit.
MPs and union leaders from Vote Leave Watch are calling on Theresa May to keep her promises to British workers and enshrine these court decisions in British law before we exit the EU.
Commenting, Emma Reynolds MP, Patron of Vote Leave Watch, said:
“The Prime Minister has talked the talk on protecting workers’ rights; now it’s time for her to walk the walk.
“Her fine words at Tory party conference will mean nothing unless she takes steps to stop unscrupulous employers from challenging hard-won rights in British courts once we leave the EU.
“One Act of Parliament is all it would take to enshrine these rights in statute law. And she would have my total support in doing so.”
Chuka Umunna MP, Chair of Vote Leave Watch, said:
“Vote Leavers like Boris, Andrea Leadsom and David Davis promised repeatedly that our rights at work, such as holiday pay, would be unaffected by a vote for Brexit.
“But if businesses start challenging these rights in British courts, their promises may prove hollow. The government must legislate to keep these rights in British law.”
John Hannett, General Secretary of USDAW, said:
“I’m glad the Prime Minister has pledged to transfer EU rules on workers’ rights into British law, and her rhetoric about defending working people has been welcome.
“However, she must not allow crucial rights on holiday pay to slip through the cracks. For trade union members and workers across Britain, it is vital that she legislates to protect our holiday pay.”
NOTES TO EDITORS:
The House of Commons Library states: “There are, however, cases that would be particularly susceptible to challenge. The ones that stand out are the holiday pay cases…, Bear Scotland and Lock v British Gas would almost certainly be open to challenge.”
Decisions of the ECJ protecting British workers’ holiday pay that the House of Commons Library believes could be challenged in British courts are as follows:
Annual leave during long-term sick leave
Stringer v HM Revenue and Customs sub nom Commissioners of Inland Revenue v Ainsworth; Schultz-Hoff v Deutsche Rentenversicherung Bund (2009)
The ECJ in 2009 held that the right to paid annual leave continues to accrue during sick leave and a worker on sick leave must be allowed to carry leave over into subsequent leave years.
The ECJ said that, on termination of the employment relationship, a worker who has been on sick leave and unable to take paid annual leave is entitled to a payment in lieu.
In Plumb v Duncan Print Group Ltd, the EAT suggested that absent employees should be able to carry forward the untaken annual leave for up to 18 months from the end of the leave year in which the leave arises.
Rolled-up holiday pay
Robinson-Steele v RD Retail Services Ltd and other cases (2006)
Rolled-up holiday pay arrangements provide that a specific part of a worker’s wages represents holiday pay.
As payment in respect of a period of holiday is spread throughout the year, the worker is then paid nothing when he or she physically takes the holiday.
This practice used to be common until the ECJ decision in Robinson-Steele, which decided that the approach of rolling up holiday pay into wages is unlawful.
The issues was referred to Europe after the UK courts and tribunals could not come to a conclusion on this point.
Holiday pay calculations
Williams v British Airways plc (2011)
In 2011, the ECJ delivered its decision in an employment law case about whether or not pilots on annual leave are entitled to continue to receive allowances for the amount of “flying time” and time away from their base airport.
While the case did not receive much fanfare at the time, it has taken on added significance in the past few years because of the subsequent Lock and Bear Scotland cases.
Williams effectively wiped away the orthodox view from UK case law that holiday pay has to include only a worker’s base pay, and not additional payments such as overtime pay and commission.
The decisions in Lock and Bear Scotland, which were heavily dependent on the ECJ decision in Williams, mean that UK employers now have the additional burden of having to calculate workers’ holiday pay with these extras included.
Following ECJ case law on holiday pay the Employment Appeal Tribunal in Bear Scotland established that holiday pay must be based on a worker’s normal earnings, taking into account any non-guaranteed overtime he had undertaken during the pay reference period. The wording of the domestic law was clear that only guaranteed overtime should be taken into account. In order to arrive at a decision that was in line with ECJ case law, the Employment Appeal Tribunal read words in to the Working Time Regulations 1998 (i.e. interpreted the legislation by adding in words). Thus, the decision was at odds with both the wording of domestic law and the conventional method of statutory interpretation. If the UK were no longer required to give effect to ECJ case law, it is difficult to see how this decision could withstand challenge.
Lock v British Gas
The Employment Appeal Tribunal’s decision in Lock is similar to its earlier decision in Bear Scotland, and is based on the same ECJ case law. In short, in Lock, the EAT added words in to the Working Time Regulations 1998 to the effect that holiday pay has to be based on normal pay, factoring in commission payments. Again, it is unlikely that, absent the Marleasing duty, this decision could withstand challenge.