Following Brexit, the UK Government started consultations to review and amend EU legislation, and – in particular, the Working Time Regulations and TUPE. These amendments have been announced, and are set to come in to force on 1 January 2024.
Updates to Working Time Regulations
The 20 days annual leave – also referred to as Euro Leave, will remain in place, however this will now be separate from the UK-introduced 8-day bank holiday entitlement. Holiday pay for the 20 day/4 week period should equate to a worker’s normal wage. The 8 day/1.6 week bank holiday entitlement should also meet basic pay. As such, these factors must be included when calculating weekly wages…
- Commission which is linked directly to the performance of tasks which a worker is obliged to carry out under their contract.
- Overtime payments which have been regularly paid in the 52-weeks period leading up to the calculation date.
- Payments for professional or personal status relating to length of service, seniority, or professional qualifications.
Regulations for Irregular Working Patterns
Part-year workers – and those who otherwise work irregular hours, will not be entitled to set annual holiday entitlements under Regulation 13. Instead, they will be granted holidays under the new 15B Regulation - with 12.07% of their hours worked based on normal pay. This revokes the average over 52-week period rule introduced by the Brazel v Harper Trust case. The method of calculating will be set out in Regulation 16. Significantly, the entitlement will be calculated in hours rather than weeks.
- A worker is an ‘irregular hours workers’ if – under their terms and conditions of their contact, the number of paid hours they work in each pay period is wholly or mostly variable.
- A worker is a ‘part-year’ worker if – under their employment contract, they are required to work only part of a year. As such, there will be periods within the year of at least one week where they will not be required to work, and will not be paid for it as a result. Sickness and maternity leave do not count towards this.
- Agency workers will be subject to the same criteria, depending on what is outlined in their contract of employment.
How does this Impact Employers?
The practice of including holiday pay into normal pay – often referred to as rolled-up holiday pay, will now also be permitted for part-year and irregular hours workers. Employers will be required to assess and calculate these rates based on a worker’s total earning in a given pay period. Nevertheless, even though this is now lawful, employers will need to be transparent with the calculations and payments.
From 1 January 2024, workers will not accrue Covid-19 carry-over leave. However, they will be able to use any accrued holiday hours until 31st March 2024. The European Court’s decision to allow carry over leave where a worker is unable to take the leave due to long-term sickness absence, is retained.
Employers are also no longer required to keep records of their workers’ daily hours. Although there is no mandatory requirement to keep records of hours worked or rest breaks, employers are strongly advised to continue keeping such records to prove their compliance if required.
TUPE
The new regime will allow small businesses – defined as employing less than 50 staff, as well as those undertaking a transfer of less than 10 employees, to consult staff directly in the absence of any staff representatives.
This article is intended for guidance purposes only. Given the nature of this law and its amendments, there could be much uncertainty for business owners heading into 2024. Employers are advised to call our Legal Helpline on 0116 274 9193 – where an expert team of HR consultants can help guide you through the minefield of HR legislation.
