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Select Committee on Enterprise and Economic Strategy debate -
Wednesday, 26 Feb 1997

SECTION 20.

I move amendment No. 27:

In page 20, lines 5 to 7, to delete subsection (4) and substitute the following:

"(4) In this section, ‘normal weekly rate' means—

(a) in a case of payment wholly by a time rate or by a fixed rate of salary, and in any other case of payment not varying in relation to the work done, the sum (including any regular bonus or allowance which does not vary in relation to work done, but excluding pay for overtime) payable in respect of normal weekly working hours in the working week next before annual leave or cesser of employment,

(b) in any other case, a sum equivalent to the average weekly earnings (excluding pay for overtime) for normal working hours calculated by reference to the earnings in respect of the time worked during the thirteen weeks ending on the day before annual leave or cesser of employment or, if no time was worked during those weeks, during the thirteen weeks ending on the day on which time was last worked before annual leave or cesser of employment.".

The purpose of this amendment is to seek to insert into the Bill a definition for "normal weekly rate". The Bill provides in section 20(2) that an employee's holiday pay is to be paid at the normal weekly rate, but that is not defined. I suggest the definition should be made by way of regulations by the Minister and that the definition from the Holidays (Employees) Act, 1973, which is repealed, should be used here. It has worked well in practice for employees and employers.

The definition in the Holidays (Employees) Act, 1973, has caused some confusion. It is intended to make regulations, in advance of which there will be consultation with both sides of industry, to ensure we get it right because the existing legislation has caused confusion. That is a better way of dealing with it than tying it down in a way which may also turn out to be ambiguous. It will be discussed with both sides and regulations will then be made.

Will that be under separate legislation or on Report Stage of this Bill?

No, we are repealing the Holidays (Employees) Act and incorporating it into this legislation. There have been problems with the definition in that Act as there has been some ambiguity about it. It is proposed to discuss exactly what definition we will use in agreement with both sides.

And that will be brought forward for Report Stage?

No, it will be brought forward in regulations.

I wanted to clarify that.

I prefer clarity in legislation; I am not a great fan of regulations. However, we will not press the amendment as it is not a fundamental issue. I accept the Minister of State will bring in something which can be agreed between the social partners, with which I would be happy.

Amendment, by leave, withdrawn.
Section 20 agreed to.
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