Sajjad has criticised a recent landmark ruling on holiday pay citing the damaging effects it will have on the North West’s businesses as a result of the EU’s Working Time Directive.
The ruling, made this week at an Employment Appeal Tribunal in the UK, states that employers will have to include overtime in holiday pay to their employees.
Although this may seem like good news for workers, Sajjad has highlighted the detrimental effects it could have upon the region’s businesses, pushing up costs and prices for consumers.
Saj has laid the blame for this judgment squarely with the incompatible EU Working Time Regulations, implemented in the UK in 1998.
It is estimated that up to a third of Lancashire’s businesses pay staff overtime and could be hit with extra payroll costs. Over 100,000 enterprises in North West region could potentially be affected.
Speaking from the European Parliament in Brussels, Saj said:
“Last week’s ruling focuses on the interpretation of the Working Time Directive, which fails to define clearly how holiday pay should be calculated. This has resulted in a number of European Court judgments concluding that extra regular payments such as overtime, allowances and commission need to be considered in holiday pay.
“The ruling could cost North West businesses billions of pounds extra on their payroll bills, potentially forcing up the costs of products and services and putting many smaller firms out of business altogether.
“It will also make our businesses less competitive globally at a time when many are seeing a recovery and could result in job losses across the region. Firms are also worried that claims could be back-dated to 1998.”
A series of on-going court cases in the UK will test the domestic application of the European rulings and the Government has set up a taskforce to assess the Employment Tribunal Decision.
Mr Karim added:
“If one thing is to come out of these judgments, it is how poorly conceived the Working Time Directive is and how it is detrimental to businesses, the consumer and the job market.
“I and Conservatives will be pressing to scrap it all together”