Rolled Up Holiday Pay 

The law relating to holiday pay continues to change. Rolled up holiday pay, also known as the 12.07% method, used to be lawful, but was recently replaced by another method which used average pay over the preceding 52 weeks. This was after the case of Harper Trust v Brazel. This averaging method produced some strange results, since weeks without any work had to be discounted and therefore were not factored into the average. It meant that some part-time workers were getting a very large amount of annual leave compared to the hours which they had actually worked.

The government has now said that rolled up holiday pay will be legal again, but only for those who work irregular hours, and for part-year workers. Employers will be able to choose between the rolled up holiday pay method and the averaging method. This will be in force from the holiday year which begins after 1 April 2024. For many employers who use the calendar year as their holiday year, the changes will therefore be in force from 1 January 2025.

The first four weeks of annual leave must be paid at the worker’s average rate, taking into account commission payments and most overtime and bonuses. The remaining 1.6 weeks’ leave and any additional contractual annual leave can be paid at basic rate for most workers.

Employers who wish to use rolled holiday pay must make sure that they pay at least 12.07%, that the extra payment is made at the same time as the work is done, and that the holiday pay is itemised separately on the payslip.

Changes to TUPE Consultations

Under proposed reforms, businesses with fewer than 50 employees and businesses of any size who are undergoing a small transfer of fewer than ten employees, can consult directly with their employees if there are no existing worker representatives in place. This will apply for TUPE transfers taking place on or after 1 July 2024.

National Minimum Wage

There will be the usual increases to National Minimum Wage and National Living Wage from 1 April 2024. For the first time, the National Living Wage will apply to workers aged 21 and over, rather than those aged 23 and over.

Miscarriage Leave Bill

This bill would introduce three days of paid leave for those who have experienced a pregnancy loss before 24 weeks’ gestation. It is not in force yet, and it has been delayed several times. We will keep you updated.

Carer’s Leave Act

This is expected to come into force in April 2024, or shortly afterwards.

It would apply to employees from day one of employment.

It would allow workers to take one week of unpaid carer’s leave per year. This would be to care for a dependant with an illness or injury which is expected to last more than three months, those with a disability, or those who need care due to old age.

Protection from Redundancy (Pregnancy and Family Leave) Act 2023

Currently, when in a redundancy situation, employees who are on maternity leave, must be prioritised for suitable alternative employment. From 6 April 2024, this protection is due to be extended to employees who are pregnant, who have recently suffered a miscarriage, those who have recently returned from adoption leave or shared parental leave.

Worker Protection (Amendment of Equality Act 2010) Act 2023

This act will require employers to be more proactive when taking reasonable steps to prevent sexual harassment at work. It applies to all genders. An example of being proactive would be providing employees with training on how to recognise and avoid sexual harassment.

This is expected to come into force in October 2024.

Employees who feel that this duty has been breached could bring a claim in the employment tribunal, but it would have to be attached to a claim for sexual harassment as it is not a freestanding claim.

The Neonatal Care (Leave and Pay) Act 2023

This would allow parents whose newborn baby is admitted into neonatal care to take up to 12 weeks of paid leave. This will probably not come into force until April 2025. The leave would be a day one right and would be in addition to other leave entitlements such as maternity and paternity leave.

Employment (Allocation of Tips) Act 2023

This act would make it unlawful for businesses to hold back tips from their employees. Tips would have to be fairly allocated between workers, paid to them no later than the end of the month following the month in which the payment was made by the customer. Employers must have a clear written policy on tips and they must keep a record of tips for at least three years.

This act is expected to come into force in May 2024.

Employees would have 12 months to bring a claim after tips were withheld. This limitation period is longer than the usual one of three months.

Flexible Working Requests

From around July 2024, the following changes are expected to flexible working requests:

• The right to request flexible working may become a day one right, rather than needing 26 weeks of service.
• Employers will have two months to respond, rather than three months.
• Employees will no longer be required to explain the impact their request will have on the business.
• Employees will be able to make two requests in a 12 month period, rather than just one.

Flexible working request commonly include requests to work part-time, job share, to work compressed hours, to work term time only or to work from home.

Employees with irregular working patterns will also be able to request more predictable hours. Employers will have to consider such requests seriously and provide standard approved reasons if they wish to reject the request, just as they do with flexible working requests.

If you have any questions, please contact us by emailing enquiries@perspectivehr.co.uk or by phoning 01392 247436.