Labour: Holiday pay changes to see key workers hundreds of pounds worse off

Labour has warned that changes to holiday pay currently being considered by government ministers following the end of the Brexit transition period would leave key workers hundreds of pounds out of pocket every year.

Analysis by the Labour Party, released ahead of an opposition day debate on holiday pay on Monday, found that care workers, haulage drivers and police officers among other key workers would lose out on hundreds of pounds annually.

The change being considered by the government, one of several proposed deregulatory measures reported earlier this month, would change the way holiday pay is worked out by excluding regular overtime from the calculation.

Under the current rules, workers are entitled to a week’s pay for each week of statutory leave that they take. Their employer is required to include any regular overtime done to work out how each week’s pay is calculated.

This means that under the current arrangements if your pay is fixed at £250 a week but in practice you usually earn £300 a week due to regular overtime hours, for example, the higher figure should be used to calculate your holiday pay.

Lucy Powell said: “Once again the government is exposing its real priorities by putting the needs of workers and their families to the back of the queue. Ministers are already freezing key workers’ pay, cutting Universal Credit, and cutting corners on free school meals.

“Now they’re considering changes which would leave many key workers hundreds of pounds out of pocket and risk the financial security of families. And all in the middle of a pandemic and economic crisis.

“It’s a disgrace this government would clap key workers on the front step and try and take away their rights and pay via the backdoor.”

According to Labour’s analysis, the changes to the way holiday pay is calculated would see the average full-time care worker lose out on £239.60 a year, while someone working in food and drink processing would lose out on £500 a year.

The party has said that the average full-time driver of large goods vehicles would lose £413.60, a police officer would take home £308 less and someone working as a full-time security guard would lose on average £312.

Referring to an opposition day motion tabled by Labour, the shadow minister for business and consumers added: “Conservative MPs have a chance to stand up for key workers and protect their hard-earned holiday pay. They must take it.”

The figures released by the Labour Party this evening come ahead of the next opposition day in parliament on Monday. There are 20 opposition days per parliamentary session, which allow opposition parties to set the agenda.

Labour has announced that it will use this opportunity to force a House of Commons vote to protect workers’ rights in the wake of the end of the Brexit transition period, including on the calculation of holiday pay entitlement.

The motion also calls on the Tories to rule out changes to the 48-hour working week and rest breaks at work in a bid to prevent Conservative ministers “taking a wrecking ball to hard-won rights” now the UK has left the EU.

Labour and trade unions declared last week that they would fight government plans to rip up UK workers’ rights following reports of a proposed package of deregulatory measures being drawn up in the Department for Business.

The plans include ending the 48-hour working week, “tweaking” rights to rest breaks at work, not including overtime pay in holiday pay entitlement calculations and scrapping the need for businesses to log daily reporting of working hours.

Labour has tabled a second motion demanding a U-turn on plans for council tax hikes. Opposition day motions are not binding on the government but Labour has repeatedly used them to highlight difficult issues for the Tories.

The party used the most recent opposition day debates earlier this week to table motions on free school meals and Universal Credit. Both motions passed after Boris Johnson accused Labour of “playing politics” and instructed Tory MPs to abstain.