Government Responds To Holiday Pay Consultations
Further to a previous article, the Government has now published its response to a consultation which included amongst others, proposals to simplify the calculation of holiday pay. It has, moreover, also responded to a previous consultation, within the same response, which related to how holiday entitlement for employees who work irregular hours or for part of the year will be calculated in accordance with the recent ruling of the Supreme Court in the case of Harpur Trust v Brazel (2022).
The Government responded as follows:-
- Holiday pay for workers with irregular hours and those who only work part of the year will be revamped with the implementation of "rolled-up" holiday pay. This means that instead of being paid when taking annual leave, these workers will instead receive an enhancement to their regular pay in respect of annual leave.
- An accrual method of 12.07% of hours worked will be allowed for irregular hours and part-year workers for annual leave entitlement "in the first year of employment and beyond."
- The plan to combine the 'basic' and 'additional' holiday entitlements into one 5.6 week entitlement under a single unified set of regulations has been rejected. The Government will legislate to define what constitutes normal remuneration (i.e. to include commission, overtime, etc)
- Replicating certain retained EU case law regarding the carry over of holiday entitlement for those who are on sick leave or on statutory leave
Moreover, the Government has now published the draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, which may implement the proposed holiday pay changes as early as the 1st January 2024.
Setting out the rationale for the changes in relation to rolled-up holiday pay, the Government response states: "Much of the complexity of holiday pay comes from aligning it to the pay a worker would have received if they had been at work instead of on holiday. Allowing holiday pay to be paid as an enhancement to a worker’s pay at the time that the worker performed work, instead of when they are on holiday, would ensure that the worker’s holiday pay was as closely aligned to the pay that they would have received as possible. This is known as rolled-up holiday pay."
The response adds: "The government notes the concern that allowing rolled up holiday pay may disincentivise workers from taking leave. We consider, however, that existing safeguards are proportionate in addressing these concerns."
Statutory Sick Pay (SSP) Reform: Call For Evidence
The Work and Pensions Committee has launched a call for evidence in relation to potential reform of SSP, including on the issue of whether the current rate is adequate, whether it should be paid at a higher rate over a shorter period, and whether it should be extended to others who currently are not eligible to receive it.
The call for evidence is open for responses until the 8th December 2023.
As we highlighted in a previous article, a report from the ONS found that the rate of sickness absence in the workplace reached 2.6% in 2022, up 0.4% compared to 2021, and the highest rate recorded since 2004, when the sickness absence rate reached 2.7%.
In a letter published back on the 19th April 2023, MP’s Robert Buckland and Priti Patel called for reform to statutory sick pay to ensure that it is available to all those that require it, so that workers can take the time off they need to fully recover. They argue that this would avoid a situation where workers feel compelled to attend work whilst sick, end up becoming more ill as a result, thereby resulting in long term ill health which could otherwise have been avoided had they taken time off to recover at the outset.
