Working Time (Amendment) Regulations 2007

rose to move, That the Grand Committee do report to the House that it has considered the Working Time (Amendment) Regulations 2007. The noble Lord said: Over the past decade the Government have put in place a framework of employment rights that provides decent minimum standards in the workplace while ensuring labour market flexibility and competitiveness. In 1998, we introduced a statutory entitlement to four weeks’ paid holiday for the first time, yet we are aware that some employers count time off for bank and public holidays against that four-week entitlement. We believe that that is unfair, and in our 2005 election manifesto we proposed to address this anomaly by increasing the current four-week entitlement to 5.6 weeks—from 20 days to 28 days—for those working full time and pro rata for part-time staff. These proposals will be good news for the 6 million workers who will benefit from increased holiday as a result, particularly the low-paid, women and part-time workers who currently receive the least holiday. The benefits of holidays are clear: time away from the workplace reduces stress, increases quality of life and supports family life. However, we recognise that proposals that benefit so many will impose additional costs on businesses that currently give the bare minimum holiday entitlement. We have proposed a number of measures to help employers adjust their practices to comply with these regulations. First, we propose that the increase will be introduced in two phases with a holiday entitlement rising to 24 days this October and to 28 days from April 2009. We had intended to introduce all the additional holiday by October 2008, but on further consideration of the costs, particularly for the health and social care sector, we have delayed it until April 2009. We are aware that some employers, particularly in the social care sector, face challenges in recruiting and training staff and are required by statute to maintain certain staffing levels. The increase in holiday entitlement may place particular strain on employers and staff in providing cover for the additional holiday, and we therefore propose a transitional period until April 2009 during which time payment in lieu of the additional holiday will be permitted. From April 2009, workers must be able to take their holiday as holiday, as our intention is to enable people to have more time away from the workplace rather than to receive additional payment instead. Most employers already give their staff 28 or more days’ holiday a year. During the extensive consultation process on these changes, such employers expressed concern that they would face uncertainty and administrative costs as a result of these regulations, even though they may already comply. We are clear that we want to support such good employers while protecting vulnerable workers. We have therefore proposed an exclusion to these regulations. Where employers already provide staff with 28 days holiday, pro rata for part-timers, they will be excluded from the regulations. This incentive for early compliance will remove an uncertainty or administrative burden from good employers resulting from this regulation, while ensuring that vulnerable workers get the benefit of the increased entitlement. In developing these proposals, we have consulted widely with employers and workers. These measures, along with the detailed guidance we will be providing for employers and workers shortly, balance the demands of workers for a better quality of life with the needs of business for a productive and motivated workforce. The proposals have been welcomed by the TUC and employer organisations such as the CBI, the Institute of Directors, the British Chambers of Commerce and the Engineering Employers’ Federation. A modern economy can thrive only by adopting employment practices that recognise the central contribution made by individual workers in the business’s success and rewarding their efforts in such a way that demonstrates that they are valued and respected. These proposals deliver further fairness at work while advancing our economic competitiveness. I commend the regulations to the Committee. Moved, That the Grand Committee do report to the House that it has considered the Working Time (Amendment) Regulations 2007. 20th report from the Statutory Instruments Committee.—(Lord Evans of Temple Guiting.)