1 in 8 risk having holiday pay undermined by new Tory plans – with millions potentially left worse off

The Trades Union Congress (TUC) has published new analysis which reveals holiday pay rights for millions of workers could be weakened by new Conservative plans. Workers risk exhaustion as lower holiday pay will leave many with no choice but to forgo paid time off, the union body has warned.

Tory threats to holiday pay

The TUC has found that up to 3.5 million people – or 1 in 8 workers – are at risk of being left worse off as a result of ministers’ plans to meddle with holiday pay. The warning comes as parliament returns and the government prepares to introduce regulations reducing rights at work stemming from EU law.

Currently, the law ensures that most holiday is paid in line with workers’ normal earnings – including regular overtime, regular commission, and regular bonuses.

However, the government wants to overhaul this and is considering requiring bosses to only cover basic pay – excluding regular overtime and commission payments. This means that some workers would be paid much less than they currently are when they take their holidays.

The latest data from the Office for National Statistics (ONS) Labour Force survey suggests that 3.5 million workers do regular overtime. However, all of these workers could get lower paid time off as a result of the government’s changes.

The TUC says the Conservatives’ plans would hit workers in the lowest paid occupations hardest, where regular overtime is more common. Some low-paid workers might be forced to forgo their leave altogether because they can no longer afford to take time off, the TUC warns.

Rolled-up holiday pay

Workers’ ability to take leave could also be hit by a separate government proposal – also introduced through powers in the government’s Retained EU Law Act – to allow ‘rolled up holiday pay’, according to the union body. This would rip up workers’ rights to be paid while they are on annual leave. Instead, employers could include holiday pay in a worker’s hourly pay rate, making this hourly rate slightly higher – but any holiday the worker then takes would then be unpaid.

The union body says imposing this type of holiday pay stops low-paid workers from taking time off work because “for those struggling to put food on the table and bills, money will always come first”. It also makes it far harder for workers whose bosses refuse them time off to seek compensation from an employment tribunal.

The union body says these measures risk increasing exhaustion and illness among workers.

‘Holiday shouldn’t be the preserve of the rich’

TUC general secretary Paul Nowak said:

No one should be left out of pocket when they take time off. But the Tories’ plan to meddle with the way holiday pay is calculated could see millions of grafters who do regular overtime worse off when they take holiday. This would be a huge blow to working people in every corner of the country.

The last thing they need is less money when they take a well-earned break. Ministers must protect working people’s holiday pay and ditch these plans without delay.

On the risk that workers don’t take time off as a result of the changes, Nowak added:

Having time off shouldn’t be the preserve of the wealthy. But the Conservatives’ plans would force many low-paid workers to forgo holidays and time off with family. For those struggling to put food on the table and pay their bills, money will always come first – no matter how much they need a break. Working people are already working around the clock to make ends meet – and too many are exhausted.

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