Throughout its membership of the European Union, the UK implemented a number of EU laws. As a result of Brexit, the European Union (Withdrawal) Act 2018 confirmed that all current EU law as of 31 December 2020 would continue to apply in the UK until further notice. The government has, finally, shared a first draft of The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (“the Regulations”), confirming which parts of EU law will be retained for the foreseeable future and which will be consigned to history.
There are no changes to the UK statutory holiday entitlement, which will remain 5.6 weeks -comprising of 4 weeks deriving from EU law, and 1.6 weeks deriving from domestic law.
When calculating a ‘week’s pay’ for the purposes of calculating an individual’s holiday pay, the following will be included:
- 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.
The Regulations also confirm that employers will be permitted to use “rolled-up” holiday pay for part-year workers and those with irregular hours. This means that, instead of the worker taking that holiday, they can be paid for this instead. Employers will therefore be able to increase a worker’s pay by 12.07% for every hour worked, to take account of the equivalent holiday entitlement they would otherwise accrue.
We note that this will only apply to those working irregular hours and for holiday years starting on or after 1 April 2024. As such, if an employer’s holiday year starts in January, the rules will not apply to that employer until 1 January 2025.
Working Time Regulations
Following an ECJ Judgement (CCOO v Deutsche Bank), it has generally been understood that employers must keep detailed working hours records for staff as part of their Working Time Regulations (“WTR”) obligations. The government has admitted that it believes this requirement to be disproportionate, so the Regulations clarify that employers no longer need to maintain these records, provided that they can demonstrate compliance with the WTR in other ways.
Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”)
Prior to the transfer of a business as a going concern, an employer must consult with their employees as to any impact of that transfer. Currently, an employer must consult with employee representatives rather than those employees directly, unless there are fewer than 10 employees, in which case the employer can consult with them directly.
In relation to TUPE transfers taking place from 1 July 2024, the Regulations will allow small businesses with fewer than 50 employees, and businesses of any size which are undertaking transfers of fewer than 10 employees, to consult with employees directly, provided that there are no existing representatives in place.