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2024 Updates to UK Employment Laws: Holiday Pay, Working Time, and TUPE

The UK government is set to implement significant changes to employment laws in 2023, affecting holiday pay, working time, and the Transfer of Undertakings (Protection of Employment) Regulations, commonly known as TUPE.

Holiday Pay and Entitlement:

The new regulations, effective from January 1, 2024, are designed to maintain certain EU rules on holiday entitlement and pay, even as EU supremacy over UK law concludes on December 31, 2023. This includes a new system for calculating holiday entitlement for part-year workers and those working irregular hours.

Currently, workers are entitled to 5.6 weeks of holiday, divided into two categories: 4 weeks as per the EU Working Time Directive and an additional 1.6 weeks as per UK regulations. However, the government has chosen to maintain these distinct categories rather than merging them into a single entitlement.

Carrying Over Holiday Entitlement:

The proposed changes preserve workers’ rights to carry over untaken holiday in specific circumstances, such as maternity or family leave and sickness. Additionally, workers can carry forward any untaken leave if employers do not recognize their right to annual leave, provide a reasonable opportunity to take leave, or warn them about losing their annual leave entitlement.

Holiday Accrual:

Contrary to initial proposals, the government decided not to proceed with the plan that statutory holiday entitlement should accrue during the first year of employment at the end of each pay period. Instead, the accrual system for the first year of employment will remain unchanged.

New Regime for Part-year and Irregular Hours Workers:

The government introduces a new holiday regime for regular hours and part-year workers, effective from April 1, 2024. Workers will accrue annual leave entitlement on the last day of each pay period at a rate of 12.07% of the number of hours worked, subject to a maximum of 28 days per year.

Rolled-up Holiday Pay:

The draft regulations will permit rolled-up holiday pay for holiday years from April 1, 2024, but only for irregular hours and part-year workers. This method includes an additional amount in respect of holiday pay in each pay slip.

Employer Responsibilities:

Employers need to familiarize themselves with these changes, especially those not currently paying workers their normal remuneration for the 4-week EU-based holiday entitlement. They should also review employment contracts and policies to reflect the new holiday accrual rules and consider using rolled-up holiday pay.

Working Time and TUPE Regulations:

The details of changes to working time regulations and TUPE were not explicitly outlined in the sources provided. However, it’s essential for businesses to stay informed about any updates or amendments that could impact their operations and workforce management.