The Government has published its draft statutory instrument, The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 which incorporates changes that are mostly coming into effect from 1 January 2024.
Employers will be able to ‘roll-up’ holiday pay
The new regulations look to simplify holiday pay calculations and will introduce ‘rolled-up’ holiday pay for irregular hours and part-year workers so long as their holiday pay is calculated at 12.07% of their pay and is paid at the same time as their ordinary pay.
Carry-over of leave
The Government is also restating various EU case law, which allows for the carry-over of leave in the following circumstances:
- all statutory annual leave to the following year when the worker has been unable to take leave due to being on family related leave.
- regulation 13 leave (4 weeks per year) for a maximum of 18 months where the worker has been unable to take leave due to sickness.
- regulation 13 leave where the worker has not been given opportunity to take leave, or their employer has not informed them that any leave which they have not taken and which cannot be carried over will be lost.
Defining ‘normal remuneration’ for the purposes of holiday pay
The new regulations will make it clear that the following payments must be included in the four weeks of leave set out under Regulation 13 as follows:
- payments, including commission payments, which are intrinsically linked to the performance of tasks which a worker is obliged to carry out under the terms of their contract.
- payments for professional or personal status relating to length of service, seniority or professional qualifications.
- other payments, such as overtime payments, which have been regularly paid to a worker in the 52 weeks preceding the calculation date.
Irregular hours workers and part-year workers: entitlement to annual leave
The new regulations will introduce an accrual method for irregular and part-year workers.
From 1 April 2024, the amount of annual leave which an irregular hours worker, or a part-year worker is entitled to, is the amount of annual leave that they have accrued in that year, plus the amount of annual leave (if any) that they have carried forward into that leave year, less the amount of annual leave (if any) that they have taken during that leave year.
In each leave year, an irregular hours worker, or a part-year worker, will accrue annual leave:
- during any period of sick leave or statutory leave, in accordance with regulation 15C, and
- otherwise, on the last day of each pay period at the rate of 12.07% of the number of hours that they have worked during that pay period.
A worker however cannot accrue more than 28 days of annual leave under the new regulations.
Other workers will continue to accrue annual leave in the first year of employment as they do now, by receiving 1/12th of the statutory entitlement on the first day of each month and to pro-rate it thereafter.
Changes to record keeping
The new regulations require employers to keep records which are ‘adequate’ to show whether an employer has complied with the limits specified in the Working Time Regulations. Records can be maintained and kept in a manner and format that the employer reasonably thinks is appropriate.
Small businesses (with less than 50 employees) who are carrying out a small TUPE transfer of fewer than 10 employees, will now be able to inform and consult directly where there are no existing worker representatives in place.
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