As we move into the new year there are a number of recent updates and legislation changes to make you aware of in this month’s newsletter. A summary of each is listed below (we have tried to condense this as much as possible) but if you would like more information please do not hesitate to contact a member of the Employment Team:
Holiday Pay
A number of changes have been introduced to the Working Time Regulations 1998, largely in response to the landmark judgment in the Harpur Trust v Brazel case, and came into effect on 1st January:
- Holiday entitlement for workers with irregular hours or part-year workers (as in the Harpur Trust case) can be calculated using the well established 12.07% method, i.e. holiday pay accrues at a rate of 12.07% of the hours worked. Therefore the holiday pay can be calculated in hours rather than weeks, restating the simpler way of calculating holiday pay for these types of workers. Where such worker is absent due to sickness or family related statutory leave, the applicable reference period will be 52 weeks, i.e. you must work back 52 weeks to determine average weekly working hours. This will apply for holiday years beginning on or after 1st April 2024.
- Under the Covid regulations, workers were previously allowed to carry over holiday into the next two years if they could not take it because their work was impacted by Covid. These regulations have now been repealed from 1st January but all of the “usual” principles on carry over of annual leave remain in place, including but not limited to where a worker has been unable to take leave in the relevant year due to sickness or maternity leave.
- The various elements to be included when calculating holiday pay have now been set out clearly. The amended Regulations make clear that of the 5.6 weeks statutory minimum annual leave, the first 4 weeks must include certain elements while the remaining 1.6 weeks can be calculated at a worker’s “basic” rate. The elements which must be included are payments intrinsically linked to job performance (i.e. commission), payments relating to status (professional or personal) relating to length of service, seniority or qualifications and finally, any other payments regularly paid to the worker in the previous 52 weeks, i.e. overtime.
- Rolled up holiday pay is no longer unlawful as long as a number of conditions are met including it must be paid in the period which holiday accrues and at the rate of at least 12.07% of normal pay.
- Finally, the requirements to keep records of daily working time for each worker have been relaxed. “Adequate” records are no longer required and the employer can keep records as they see reasonably fit so long as it maintains compliance with the obligations.
The Government has produced some helpful guidance on these changes which includes a number of practical working examples, which you can access here: https://www.gov.uk/government/publications/simplifying-holiday-entitlement-and-holiday-pay-calculations/holiday-pay-and-entitlement-reforms-from-1-january-2024?mc_cid=c00bbd4c00&mc_eid=7b4a41adf6
New employment rights effective from 6th April 2024
The Government has introduced a number of new rights which relate, generally speaking, to family related matters as follows:
- Flexible Working (Amendment) Regulations 2023 – these Regulations remove the requirement for an employee to have at least 26 weeks’ continuous service before they can make a flexible working request and instead make this a day one right.
- Protection from Redundancy (Pregnancy and Family Leave) Act 2023 – employees on maternity, adoption or shared parental leave (SPL) are currently entitled to be offered suitable alternative employment over and above anybody else in a redundancy situation. The new Act extends this protection where the employer is notified of pregnancy on or after 6th April 2024 to a period of 18 months from the estimated week of childbirth, the placement for adoption or for SPL, from birth if the parent has taken at least 6 consecutive weeks of SPL.
- Carer’s Leave Regulations 2024 – employees will have a day one right to apply for up to one week of unpaid carer’s leave in a 12 month period where they have a dependent with a long term care need and the absence is to provide or arrange care. Such employees will also be protected from detriment or dismissal because they take or seek to take such leave (or the employer believes they are likely to).
National Minimum and Living Wage Rates
As is usual, the current rates of National Minimum and National Living Wage will increase from 1st April 2024. You can access the current and new rates here: https://www.gov.uk/national-minimum-wage-rates
