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The government has unveiled a draft statutory instrument that outlines crucial amendments to holiday pay, TUPE, and working time regulations: The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023.
Expected to be enforced from 1 January 2024, these changes aim to provide clarity for employers around some key pieces of EU derived law, many of which have been the subject of various case law.
Here's a breakdown of the key changes:
- Simplified Holiday Pay Calculations: The proposed changes permit rolled-up holiday pay (at 12.07% of pay) for part-year workers and those with irregular working hours. This will come as a relief to many employers who have been stumped since the Harpur Trust v Brazel holiday pay decision earlier this year.
- Retained EU Case Law Clarification: Various pieces of retained EU case law are restated to emphasise their continued relevance in UK law post-Brexit. This includes allowing the carryover of 4 weeks annual leave to the following year in cases where a worker is unable to take leave due to sickness or where they are prevented from taking all their holiday by the employer (for example, due to business demands). It also provides a welcome resolution to the current contradiction surrounding the carryover of holiday due to family related leave. Going forward, it will be clear that employees on family related leave will be entitled to carryover all of their holiday entitlement to the next holiday year.
- Expanded Definition of 'Normal Remuneration': For the 4 weeks of leave derived from the Working Time Directive, 'normal remuneration' for holiday pay calculations will include commission payments and other regular overtime payments, cementing the principles established over the years through various case law.
- Removal of Additional Record-Keeping Requirements: The onerous working time record-keeping requirements outlined in the ECJ judgment in CCOO v Deutsche Bank are removed. This decision alleviates a huge burden on employers, who are currently required to keep records of all working and rest time.
- TUPE Transfer Consultation Flexibility: Small businesses (with fewer than 50 employees) involved in TUPE transfers of any size, and those undertaking a small transfer (of fewer than 10 employees), gain the flexibility to consult employees directly if no existing representatives are in place.