Employment Law & HR Update

October 2022

Holiday Pay

A recent case in the Supreme Court has significantly changed the approach employers should be taking when calculating holiday entitlement and holiday pay for anyone who only works for part of the year (e.g. term time or casual workers) and the traditional method of calculating holiday entitlement at a rate of 12.07% of hours worked, which was previously recommended by ACAS, is no longer considered lawful under the Working Time Regulations.

The Supreme Court advised that a different (and fairly complicated) method known as the ‘Calendar Week Method’ should be used for calculating holiday entitlement and pay instead. It was held that the holiday entitlement of 5.6 weeks should not be reduced pro rata for "part-year workers" (those who are engaged 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.

If you engage staff who only work for part of the year, it is important to familiarise yourself with the changes and consider updating your procedures and contracts accordingly

ACAS advice on suspension

ACAS have published new advice on how to handle staff suspension at work. The advice is clear that suspension should only be used where it is necessary to carry out an investigation, where the situation is sufficiently serious and where there is no alternative. ACAS states that each individual situation should be carefully considered and alternatives could include measures such as changing shifts, working from home or working in a different part of the business.

Advice should be sought when considering suspension as suspensions which do not comply with the ACAS guidance could undermine the fairness of any resulting disciplinary procedures.

Right to work checks

From 1 October 2022 employers are no longer able to use the temporary changes to right to work checks brought in during the Covid-19 pandemic. That means employers can no longer rely on scanned copies of right to work documents or use video calls to verify these. Employers must now revert to carrying out in-person checks of original documents as was the procedure pre-Covid.

Alternatively, depending on the immigration status of the individual, the Home Office provides an online checking service or, in the case of British or Irish passport holders, a third party service provider can be used to verify passports using particular validation technology.

IR35

Although it had been announced by the previous Chancellor, Kwasi Kwarteng, that the IR35 regime relating to off-payroll working was to be scrapped in April 2023, this move has now been reversed by the current Chancellor and IR35 appears set to stay.

If you have any questions about any employment law issues, please give us a call on 0191 232 8345 or head to our contact page.