ENew Employment Regulations on Holiday Pay, Working Hours & TUPE

graham | November 10, 2023 | Business employment, homepage news | No Comments

A draft statutory instrument has been published, modifying the laws on working hours, TUPE and holiday pay.

The new provisions are set to take effect from 1 January 2024, overturning some recent EU case law while reaffirming some existing EU case law in the statute books.

Specifically, the new Regulations will amend the Working Time Regulations 1998 to reduce time-consuming reporting requirements, and simplify annual leave and holiday pay calculations, as well as amend the Transfer of Undertakings (Protection of Employment) Regulations 2006 to streamline the regulations that apply when a business transfers to a new owner.

The Regulations will also revoke the European Cooperative Society (Involvement of Employees) Regulations 2006.

Holiday pay

Holiday pay calculations are to be simplified by making rolled-up holiday pay lawful for those working irregular hours and part-year workers. Holiday will accrue at 12.07% of hours worked each pay period, capped at 28 days. Holiday pay will be based on average weekly earnings, ignoring unpaid weeks. This is welcome clarification following the Supreme Court decision in Harper Trust.

In addition, ‘normal remuneration’ has been defined to include commission and other payments, such as regular overtime payments.

Holiday carry over

Existing EU case law in relation to holiday carry over rules during sick or statutory leave has now been been mirrored and incorporated within the regulations to ensure they will continue to apply under the new legal framework.

Working time

In a move to alleviate administrative obligations on employers, the requirement to keep detailed records of working hours and rest breaks for all staff has been removed, provided that “the employer is able to demonstrate compliance [with the Working Time Regulations] without doing so”.

TUPE consultation

From 1 July 2024, businesses with fewer than 50 employees, and businesses of any size transferring 10 or fewer employees under TUPE, can consult with employees directly, if there are no existing representatives.