The landscape of employment law in the UK has been undergoing significant changes following Brexit. One of the key areas of focus is the concept of holiday pay and leave entitlements. Kate Shepherd took us through these post-Brexit changes in her recent webinar, Employment Law Update & Brexit.
Kate explained a new concept being introduced that is called 'rolled-up holiday pay'. This system involves an additional amount being paid to workers each time they receive their wages to cover their holiday pay. Unlike traditional holiday pay where employees are paid while on leave, rolled-up holiday pay incorporates the holiday pay into the hourly rate. This means that when an employee takes their holiday, they do not receive any additional payments as they have already been paid upfront for their holiday.
This system can be particularly useful for employers dealing with irregular or erratic working hours. Instead of complex holiday calculations, employers can simply add an additional 12.07% (a proposed figure) to the hourly rate as rolled-up holiday pay. For instance, if the hourly rate is £15, the rolled-up holiday pay would be an additional amount calculated at 12.07% of this rate.
Interestingly, Kate explained, some companies have adopted a practice where this amount is put into a separate account for the employee. The employee can then choose to draw down from this account when they go on leave. This approach has been seen to work well, particularly for agency workers.
However, the proposed changes are not without controversy. The government proposes a minimum rate of pay based on someone's basic rate of pay, excluding any extras such as commission bonuses or overtime. This could potentially disadvantage those who earn a significant portion of their income through commission, such as car salespeople or auctioneers.
These changes are intended to be minimum entitlements, and employers could choose to enhance these. They could incorporate these enhancements into their contractual obligations and employment contracts. The arrangements for carrying over leave are also being revised, with proposals suggesting that if both employer and employee agree, the annual leave does not necessarily have to be taken in that particular year.
These changes reflect the evolving nature of employment law in the post-Brexit era. As always, it's crucial for both employers and employees to stay informed about these changes to understand their rights and obligations.
To watch the full session, please click here. In the webinar, Kate Shepherd covers:
- The new Retained EU Law (Revocation and Reform) Act 2023
- What is being repealed
- What is remaining?
- Pitfalls and implications for busy practitioners
- What to expect in the coming months
The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.
