Your latest HR update

Holiday pay for term time workers and casual staff

Further to our update in October, the government is now consulting over a proposal to make holiday entitlement under the Working Time Regulations proportionate to hours worked. This is in response to the Supreme Court decision, referred to in our previous update, which held that:

• the traditional method of calculating holiday entitlement at a rate of 12.07% of hours worked is no longer considered lawful;

• the holiday entitlement of 5.6 weeks should not be reduced pro rata for "part-year workers" (those who are employed for the whole year but only work some weeks and not others) and their holiday pay should instead be calculated by reference to average earnings over 52 weeks.

The government now proposes:

• introducing a 52-week holiday entitlement reference period for part-year workers and workers with irregular hours, based on the proportion of time spent working over the previous 52-week period (including weeks in which no work was done);

• that holiday entitlement would be calculated in hours at the start of the leave year, as 12.07% of the hours worked in the previous 52 weeks with an accrual system applying in the first year of employment;

• that agency workers would accrue leave each month at 12.07% of hours worked and that no leave will accrue in between assignments. Furthermore leave could be taken during an assignment or, for shorter assignments, could be taken (or paid in lieu) at the end;

• that, where the worker has irregular hours, a day's holiday should be calculated as the average length of a working day over the same 52-week reference period.

The consultation is due to end on 9 March 2023 and many employers will be hoping that the proposals are implemented given the increased costs resulting from the Supreme Court decision.

“Firing and rehiring” - Draft Code of Practice

The government has published a draft Code of Practice setting out best practice when employers wish to impose changes to terms and conditions with a potential outcome being dismissal and re-engagement. Failure to comply with the Code will be taken into account in any subsequent unfair dismissal claim and an unreasonable failure to comply can result in an uplift to any compensation awarded of up to 25%. The draft Code is detailed and employers should familiarise themselves with it before engaging in consultation.

Get in touch

If you would like advice on the above, or any other employment law issues, please get in touch on 0191 232 8345 or submit our contact form.