Navigating the human element of business with Sapphire HR

Welcome to our HR Advice Column, where we aim to provide quarterly insights into the ever-evolving world of HR and People Management. Please note that the information provided is accurate at the time of writing and is intended for informational purposes only. We always recommend seeking specialist advice tailored to your specific circumstances.

Our first topic of discussion is the draft Employment Rights (Amendment, Revocation and Transitional Provision Regulations 2023). This ‘draft’ legislation outlines proposed reforms to holiday entitlement and pay, set to take effect in 2024 following changes to EU Law under the Retained EU Law Act.

So, what changes can we expect in 2024 regarding annual leave?

1. The draft regulations propose allowing ‘rolled-up’ holiday pay for part-year or irregular hours workers.
2. The draft regulations suggest introducing an accrual method of 12.07% of hours worked in a pay-period for irregular and part-year workers. This method was previously deemed unlawful in Harper Trust v Brazel.
3. The draft regulations aim to revoke the Working Time (Coronavirus) (Amendment) Regulations 2020. This means workers will no longer be able to accrue Covid-19 carry over leave but can use leave accrued prior to 1 January 2024 on or before 31 March 2024.

But who exactly are irregular or part-year workers?

The draft Regulations define an “irregular worker” as someone whose paid hours per pay period during their contract term are wholly or mostly variable. A “part-year worker” is defined as someone who, under their contract terms, is required to work only part of the year and has periods of at least a week where they are not required to work and are not paid.

Therefore, what exactly are the practical implications of these proposed changes for employers.

1. ‘Rolled-up’ Holiday Pay: If this becomes law, employers will be able to include an element of holiday pay in each payment to irregular or part-year workers. This could simplify payroll processes, but employers must be transparent about how this is calculated and communicated to employees.
2. Accrual Method: The proposed 12.07% accrual method could make calculating holiday pay for irregular and part-year workers more straightforward. However, employers will need to ensure they have robust systems in place to accurately track hours worked and holiday pay accrued.
3. Revoking Covid-19 Carry Over Leave: Employers will need to manage the transition carefully to ensure workers use their accrued Covid-19 carry over leave before the deadline. This may require proactive communication and planning to avoid a rush of leave requests.
4. Definition of Irregular/Part-Year Workers: Employers will need to review their workforce and contracts to identify who falls under these definitions. This could have implications for contract drafting, payroll systems, and HR processes.

Stay tuned for our next column where we will continue to navigate the human element of business.