The Government has finally published its long awaited response following the consultation on reforms to retained EU employment law and the consultation on calculating holiday entitlement for part-year and irregular hours workers; many people know this as the consultation following the Harpur v Brazel judgement.
Following the consultation, the draft regulations allow for most of the changes to be effective from the holiday year starting April 2024.
The current annual leave entitlements will not change, meaning the existing 2 ‘pots’ of annual leave will remain:
- Pot 1 – 4 weeks paid at the normal rate of pay, which is calculated to include regular overtime paid over the last 52 weeks and any bonus (based on EU law).
- Pot 2 – 1.6 weeks paid at the basic rate of pay (based on UK law).
Currently, rolled up holiday pay is illegal, but from April 2024, rolled up holiday pay will be permissible for irregular hours workers (e.g. casual staff) or a part year (term time) workers. For someone with the equivalent of 28 days holiday (including bank holidays), their rate of pay will accrue at a rate of 12.07%. Holiday pay must be itemised separately on a payslip.
Adopting this approach will mean that irregular hours workers and part year workers will build up holiday entitlement as they work rather than getting a whole year’s holiday entitlement up front at the beginning of the year. Their pay for annual leave will stay in proportion to hours worked.
Schools’ Choice will be working with their customers to understand the implications of this change and support them with implementing any required adjustments.