In May the Government announced its intention to amend legislation in the UK now that Brexit has taken place. They are proposing making changes to employment law in an attempt to drive growth and improve outcomes, as well as to reduce burdens on business.
Some of the headline proposes are as follows:
Amending Holiday Leave Which Could Result in How Holiday Pay is Calculated.
The Working Time Regulations have had significant opposition since they were introduced. For the first decade Government, Acas, and companies alike misinterpreted them, before a raft of holiday pay claims commenced proceeding through the employment tribunal system resulting in significant uncertainty for business. At one point, holiday pay was calculated only on your contractual hours only. Then it was decided that it should include commission, bonuses, overtime, voluntary and forced, and average earnings. The most recent issue involved the case of Harpur Trust v Brazel, and the requirement for 5.6 weeks leave for part year workers, which can result in some bizarre anomalies and holiday pay calculations.
Whilst not explicit in the consultation, amendments to the WTR could result in the holiday pay calculations reverting back to the earlier position of perhaps something close to mirroring the contractual hours provided, rather than average earnings. The WTR have been ripe for clarification for some time, so it is likely that there may be significant changes in the near future over how holiday pay is calculated.
‘Rolled up’ Holiday
This could be allowed as a method of paying irregular hours workers, which could save business (and payroll providers) significant time and effort in calculating annual leave, if it was accrued and paid within the same pay period. This has previously been deemed to be unlawful on the basis that it was rarely explicitly stated and broken down in the contract and on the payslip, and it was deemed to be a deterrent to taking leave to rest and recover. However, it is possible that rolled up holiday could now be reintroduced.
It is not inconceivable that rolled up holiday pay be available to ‘unspecified hours’ contracts (zero hours / bank staff etc) and holiday pay simply revert to contractually stated hours where the hours of work are specified.
Record Keeping of Working Hours
Currently there is a requirement for businesses to keep records of working hours for their staff. This rule may be removed, on the simple basis that few organisations appear to adhere to it. How this may work in regards to any HMRC investigation into NMW could be problematic though, so even if you do retain records and this rule is removed, one would be wary of ceasing to comply with it.
TUPE Regulations
There could be changes to the rules on electing and consulting with representatives in small businesses. In essence, this is already in place for ‘mirco-busineses’ (those who employ fewer than 10 people) and could be extended to businesses who employ up to 49 people and where fewer than 9 are transferring. For small cleaning / facilities management companies, for example, this could be a significant change.
There is a lack of clarity over whether these proposals to amend employment law will be enacted, nor is there any certainty that it will happen. It is, however, an area of law to keep an eye on moving forward.
