Draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023

Stella Creasy Excerpts

Tuesday 5th December 2023 General Committees

[Stella Creasy (Walthamstow) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Efford, as we discuss a very important piece of legislation—I believe it is the first statutory instrument to come forward under the Retained EU Law (Revocation and Reform) Act 2023. The Minister says that there are countless pieces of bureaucracy retained from our relationship with Europe that the Government want to get rid of. My hon. Friend the Member for Ellesmere Port and Neston has done an admirable job in deconstructing the entirety of this statutory instrument. I have a few simple questions that I suspect my constituents, many of whom will be affected by the draft regulations, because many of them are in low paid, zero-hours, flexible work.

[Mark Garnier (Wyre Forest) (Con)]

I hope the hon. Lady will forgive me for making an obvious point, but while I am delighted to be accompanied by many Government Members, I am wondering whether her Opposition colleagues have better things to do than to come here to discuss this “very important piece of legislation”?

[Stella Creasy]

I wonder about all the hon. Gentleman’s colleagues of the female persuasion, who also appear to be missing from the Committee. That matters because I have some very simple questions for the Minister about the regulations, and it is rather notable that I am the only woman here to speak. The hon. Gentleman wants to play games; I want discuss the practicalities of the legislation and how it will affect the daily lives of our constituents. I hope we all recognise employment protections matter. After all, the reason why we have employment protections is that, although there are some brilliant employers who work very closely with our constituents to make sure they get the best out of them, unfortunately some employers are exploitative and not the kind of people we want to encourage. We have these rules because exploitation does not stop at our borders, and one of the reasons we signed up to common frameworks was our recognition that those bad employers could spread bad practice. Now that we have left the European Union and the protection that came from those frameworks, I have some questions for the Minister.

I welcome what the Minister said about the continuation of the rights under the Moreno Gómez case to do with taking full holiday entitlement outside of one’s maternity period, but he will recognise that that case is relevant to his introduction of rolled up holiday pay. There was a very good reason why that court case ended in the decision that it was not fair to ask employees to take rolled up holiday pay. Women taking maternity leave were particularly affected by that and the impact of having their normal holiday pay calculation being affected by taking maternity pay.

I know the Minister did not talk specifically about that, but could he clarify the provision? There are women who work term-time hours or who are on zero-hours contracts who may now find themselves wondering what it might mean for them if their employer decides to extend rolled up holiday pay. Unfortunately, some employers were still doing this, but it was illegal and therefore people had rights; now, they will not have a right to resist it.

That brings me to my second question for the Minister. The regulations will be brought in from January next year. If our constituents are now being told that they are going to have rolled up holiday pay, what right do they have to challenge that if they feel it is not in their interests? My hon. Friend pointed out this is a transfer of £250 million a year from employees to employers because, frankly, rolling up means missing out on the hours that people are working. That is why the European Court of Justice felt it not fair to enforce the policy. What rights do employees who signed contracts on the basis that they were not going to have rolled up holiday pay and who are now facing it have? Will the Minister set those out?

What legal challenges is the Minister expecting? After all, one of the reasons why good employers do not use rolled up holiday pay is that if they get the calculation wrong, they leave themselves open to legal challenge and having to expend the amount of time and effort and energy that that takes up. It is better to have a process that records people’s entitlements as they go along, even if it is a little bit more complicated, than to be landed with problems further down the line, whether from someone going on maternity leave, or from somebody who ends up working a lot more days than was perhaps intended in their rolled up holiday pay, because they are on a zero-hours contract and something happens—like Christmas. It is a great time of year for the Government to be looking at taking money out of the pockets of employees and putting it back into employers’ pockets. People who work extra hours on zero-hours contracts might find they are entitled to more holiday, but a rolled up holiday pay policy will not cover that. What is the process for resolution?

We have talked a lot about our concerns for employees, but what about employers? If they get it wrong, what protection do they have under the draft regulations? I think that really speaks to the minister’s understanding. Why did the Court come to that decision? It was not that rolled up holiday pay was seen as a terrible European plot; it was recognised that it probably was not in people’s best interests because it created more problems than it resolved. This Government have taken a different approach. Did the Minister read the original judgment and decision? Why does he feel that this is in the better interests of the British public, who will now have to deal with the complexities the policy will introduce and deal with the inequality in power between themselves and their employer? Why does he disagree with the European judges who felt that, overall, this practice was not in the best interests of either employers or employees.

I hope the Minister understands where these questions are coming from. It is our surgeries that people will come into saying, “Hang on a minute! I’ve lost a day or possibly even weeks of holiday pay as a result of changes that you as an MP didn’t really get a chance to vote for.” This is being presented to us as a “like it or lump it” thing. I am sure that my colleagues, male and female, will get used to that, because the retained EU law Act has given the Government sweeping power to do just that and affect our constituents lives in these very practical, and probably not very welcome, ways in the year ahead.

--- Later in debate ---

[Kevin Hollinrake]

I do not accept that. Again, that speaks to the fact that the only organisations quoted in last week’s debate and today’s are the unions, such as the BMA. But I think what the if I can deal with his point, if I may, I think the

On the hon. Gentleman’s point about part-year workers, there is no doubt that there is a £150 million saving for businesses, but he also talked about parity, and this is about parity. It is about two workers working in slightly different patterns but working the same hours every year having the equal amounts of holiday pay. That is what this is. Many people would consider the judgment that led to a difference to be unfair, a perverse outcome. What we’re legislating for here is fairness across the board, whether people work a part-year or a full year.

[Stella Creasy]

The Minister is being a little bit uncharitable, given that a number of us have raised the impact on employers of the complexity of the scheme. What we recognise is that not every employer is a good employer, so both employees and employers are at risk from bad employment practices. It does not have to be a battle. I am troubled by an employment Minister who seems to think we have to pick a side. Some of us want best behaviour on both sides.

[Kevin Hollinrake]

It is quite the opposite. We do not pick a side; we try to help both sides and to achieve a balance. That is where we are. I never hear about that balance between both sides from the Opposition; all I hear is about the impact on workers and on unions. In the debate last week, not once did I hear once about the 4 million working days lost to strikes, the 2 million operations cancelled, the hospital appointments cancelled, or the £3.5 billion impact on the hospitality sector.

--- Later in debate ---

[Kevin Hollinrake]

I think we are back to the same place. As the hon. Gentleman knows, the £1.2 billion is largely the administrative costs of maintaining a recording position. What he wants to move to would cost a cost employers £1 billion. That is an interesting point.

Raising concerns that I think are scaremongering, The hon. Gentleman said that in future employers would be able to keep records “if they like”. That is not the case, and he knows that. Why would he say that kind of thing? Employers are required to make and keep adequate records. He knows that from the legislation. He also raised some concerns about change expressed by one of the unions, but it is not a change, because these measures have not yet been implemented in the UK economy. Again, he raises those concerns that somehow this is detrimental to health workers, but that is not the case. Does he accept that?

In terms of the points on rolled up holiday pay raised by the hon. Gentleman and the hon. Member for Walthamstow, the Government believe the existing safeguards are proportionate in addressing current concerns about impacts on workers from rolled up holiday pay. Employers are already required to provide an opportunity for workers to take leave, and we have heard through our stakeholder engagement that this is taking place. We also have safeguards in relation to the 48-hour working week, where a worker cannot work more than 48 hours a week unless they choose to opt out.

In terms of consultations, employers will have to tell their workers if they intend to start using rolled up holiday pay, and this payment will have to be clearly marked on the worker’s payslip. If employers need to make changes to terms and conditions, they must seek to reach an agreement with their workers or their representatives.

I think I have covered most of the points raised—I am sure I will be told if I have not. Our standards and our workers’ rights were never dependent on membership of the EU—indeed, the UK provides stronger protections for workers than are required by EU law. For example, we have one of the highest minimum wages in Europe, and on 21 November, the Government announced that we will increase the national living wage for workers aged 21 and over by 9.8% to £11.44 an hour. That will certainly help the hon. Lady’s constituents, some of whom may be low paid, as she said.

Our regulatory system is recognised globally, but we want to raise the bar even higher and deliver on our ambition to become the best regulated economy in the world, as we embrace our newfound freedoms outside the EU. By doing so, entrepreneurial businesses will have more opportunity to innovate, experiment and create jobs, and importantly, workers’ rights will be protected. This will cement our position as a world-class place to work and to grow a business.

[Stella Creasy]

I asked a specific question about the impact of rolled up holiday pay on women who take maternity leave. The Minister confirmed in his statement that the protection that holiday pay should not be calculated during maternity leave was there, but he did not clarify what this would mean if a woman came back to a role, for example, and was then told she was on rolled up holiday pay.

[Kevin Hollinrake]

I am happy to address that point, too. The hon. Lady talked about people being notified about their leave entitlement, and I did refer to that in my response. Indeed, employers are required to provide an opportunity for workers to take leave in any circumstance, and we have heard through our stakeholder engagement this is taking place. If there are specific points she wants to raise, I am happy to respond in writing.

[Stella Creasy]

A woman on maternity leave does not accrue holiday pay because she is on maternity leave, so her holiday pay, if it is then being transferred into rolled up pay, could mean that she is at a disadvantage because she was on maternity leave; there is nothing to calculate her entitlement. I am sure that the Minister thought about this. I am sure that he thought about the protections for women on maternity leave. What would a woman’s rights be if she was then moved to rolled up holiday pay?

[Kevin Hollinrake]

I will not clarify the position now, but I am happy to write to the hon. Lady. I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023.