Yet again, our membership of the EU costs businesses dearly
Dear Ken Clarke,
Much has been made of your pro-EU stance in returning to the Shadow Cabinet. Expectations are running high in terms of your policies and credibility as our economy continues its march towards new lows every week, if not every day. Peter Mandelson has already landed himself in trouble with his contentious decision to delay plans for more flexible working and extended maternity leave during the recession. Now it is your turn to face a crucial decision on working rights that has massive implications for every employer in the country.
It wasn’t that long ago that the infamous EU Working Time Directive removed the 13-week qualifying period for workers to be entitled to paid annual holiday, even though more than two-thirds of temporary workers start and leave a job within three months. More recently, the UK’s opt out from the 48-hour week, also part of the Working Time Directive, was torn up by MEPs, leaving the UK in a much weaker economic position in an increasingly tough global marketplace. Now, to compound these previous burdens, the European Court of Justice ruled yesterday that employees on long-term sick leave are entitled to take all holiday they have accrued when they return to work. This verdict comes after years of dispute over whether holiday entitlements are lost after a prolonged absence from work. It means that an employee who was away from work for two years could be entitled to at least 40 days of leave plus public holidays, as employers must give staff a ‘reasonable chance’ to take holiday they accrued while off sick. Moreoever, if workers were sacked or left a firm, they must receive holiday pay equivalent to the time they were unable to take while ill.
There are some observers, particularly the unions, who might welcome such a move. Unfortunately, this ruling will unleash a whole host of unintended consequences that will end up making the situation worse for everyone. The financial pain for employers is clear enough. Small employers in particular may have someone off work for a considerable period of time, who may never return to work at all, but will now be entitled to a lump sum payment of potentially substantial proportions. The scope for abusing this new entitlement is considerable. Although the commendable decision to replace the ’sick note’ with a ‘well note’ is a step in the right direction, a single doctors note remains the ticket to a whole month off work and a second doctors note will be rewarded with a second month off work – meaning that almost a whole week’s holiday could be accrued by someone feigning stress or depression (which, before you ask, remains a major problem) while sitting at home. What’s even more galling is that when someone is sacked, they are still entitled to their holiday pay. This presumably applies to those who have been fired for gross misconduct, unprofessional behaviour or incompetence. The overall consequences for small employers are concerning, not least because the additional burden of this ruling will mean that more employers who are more generous with sick pay (and there are plenty of them) will simply revert to awarding statutory sick pay – the bare minimum – in order to recoup their costs. In short, every single employee will be punished in order to give full leave entitlements to a handful of potentially dishonest workers.
I’m not asking you to fully reverse this decision as clarity in this area was certainly needed. However, I was under the impression that employees accrued leave because their work justified giving them time off as a form of reward for their endeavours. If someone doesn’t turn up to work at all, it is not acceptable to give them exactly the same leave as everyone else who has been driving the company forward. A much more sensible solution would be a compromise of around 25%/50% of annual leave when off sick. I urge you to look again at this ridiculous decision that hurts so many employers, especially small businesses, during these difficult economic times. You might love the EU more than most, but now is the time for a bit of objective thinking on the matter as the UK seemingly slides towards oblivion. Discussions on sick leave can wait for another day – our economy cannot.
Yours sincerely,
A.Tory
Witanagemot Blogs
why would you want to pick a fight with Ken over Europe – don’t you think he has bigger problems to solve?
‘Want’ is not the right word – I wrote to him because like Mandelson he is caught right in the middle of new legislation on employment law that have huge implications for businesses.
In case you hadn’t noticed, UK businesses are being annihilated in large numbers by the economic downturn and the issue of whether now is a good time to hit them with new legislation from the EU or elsewhere is a very serious one.
This is a systemic economic crisis. People are talking about the nation going bust if we nationalise banks with liabilities exceeding the UK’s GDP. Its by no means clear that our society will come through this intact – mass unemployment, hunger and civil unrest are all quite foreseeable against a backdrop of complete financial collapse. Remember we’re at the start of this crisis – to paraphrase Churchill, we’re not even at the end of the beginning.
To my mind that means everything is on the table for discussion. From how we organise our labour market, how we promote a work-life balance, how we protect the weak, whether business should take priority over expensive social programmes, the lot. That is going to mean talking about the laws and rules coming out of Europe and how zealously we apply them (the French don’t bother if they don’t like something, as I understand it…).
More free advertising for UKIP, I guess.
Everything certainly is on the table and I cannot believe that letting the EU make businesses both large and small jump through these sorts of hoops at a time like this is the right thing to do.
The issue of sick leave is by no means irrelevant, but it is not quite as urgent as dealing with the collapse of our banking system and economy.
Mark, you’re absolutely right. It’s a gift.
The problem is the decision is absolubtely right in law.
No contract says that your holiday will be stopped if you are ill for a period of X. The same as a promised bonus would be paid, or commission on sales.
As you and Mr Pilkington rightly point out everything should be up for discussion.
I don’t normally miss a chance to have a dig at Mandelson, but when he decided to postpone new working rights I had some sympathy for him.
Much as the unions may gasp with horror as this attitude, if it’s acceptable to nationalise banks and almost bankrupt this country with multi-billion pound bailouts, I think giving employers a bit of a break from punitive employment law is within the bounds of acceptability.
I don’t normally miss a chance to have a dig at Mandelson, but when he decided to postpone new working rights I had some sympathy for him.
But knowing how greedy and self-interested this lot are, are you sure Mandy didn’t axe the plans as he realised he’s already menopausal and thus unable to make use of pat/maternity leave?
I find it hard to believe KC has not changed his view of the EU one iota . Years ago I was very keen on something called the Common Market and even now actually leaving is a bit ..well
unconservative for my taste . Not to be dismayed by what this beast has become though , I cannot belive he is that blind .
Its possible to be trapped by your past argumemnts and pride my fathr an old Clarke style Conservatuve clings onto his Euro -Tory ideas but it gets awfully hard
I suppose it comes down to what you want from people. If its slavish adherence to a prevailing eurosceptic philosophy. then its one dimensional and slightly facistic to say that if they don’t despise the EU and all its works then they aren’t a proper Tory. Tories existed before the EU and will, I’m sure, exist long after it. If you’re head explodes at the merest mention of the EU or the slightest hint or suggestion that it is not the Devil’s Work then you need to be in UKIP.
If, on the other hand, you are confident enough of your argument (not of it winning a biased audience!) and can brook dissent then what’s the problem? Aside from poking a finger in the wound of euroscepticism, can it really be denied that old Ken brings experience and blokiness to a pretty privileged, somewhat callow-looking frontbench team?
Quite brilliant LFAT, especially this:
“I was under the impression that employees accrued leave because their work justified giving them time off as a form of reward for their endeavours.”
I like a lot of what makes Ken … Ken, but his Euro fanaticism is a real worry. I hope that the European Court decision might raise his eyebrows a little.
Thanks. I was having quite a good day before reading that. As a micro business owner, with less than 5 employees, it’s been bad enough trying to cram their work in between their holiday entitlement (another 4 days from April) and sickies.
Still waiting to see any of the promised help from this government. It’s got a whole lot worse since I can’t even sell the place because no-one can get a loan to buy it.
I can believe that. The loan situation must be making life very difficult for business owners and small companies, as always, get a particularly raw deal.
With so few people in government that have actually managed a business it is not surprising that they fail to grasp the consequences of their decisions.