We blogged back in January about the Government's consultation on how holiday entitlement for part-year workers and workers with irregular hours should be reformed, in light of the Supreme Court decision in the Brazel v Harpur Trust case. We, as well as lots of our clients, have been patiently waiting for the Government's response to the consultation.

Today, after only 9 months of waiting and refreshing the Government's website, they have now published their response and laid the Draft Statutory Instruments with a commencement date of 1 January 2024. 

The headline is that the Government will legislate to introduce an accrual method to calculate entitlement at 12.07% of hours worked in a pay period for irregular-hour workers and part-year workers. 

This will be welcome news to lots of employers across many sectors, particularly care providers in the health and social care sector, who rely on zero-hours workers and employees to provide their vital services and who have been continuing throughout this time with the 12.07% accrual method. We are also aware of many providers who have continued with rolled-up holiday pay as a technically unlawful but practically workable way of paying holiday pay to zero-hours staff. 

If there is a change in leadership following the election, it remains to be seen how the Labour Party will approach this issue. The Labour Party have said nothing about this issue in their Green Paper. They have indeed pledged that if they moved into power, they would “ban zero-hours contracts and give workers predictable contracts”. We are aware that many in the care sector have questioned whether this pledge has been thought through properly. 

The Government consultation response is contained in a document called Retained EU Employment Law. There are a range of proposals which the Government have said will be taken forward. 

Of note are the following:

  • Rolled-up holiday pay will be introduced for irregular workers and part-year workers only (meaning this method would no longer be unlawful).
  • Concerning TUPE, small businesses with fewer than 50 employees and businesses of any size undertaking a transfer of less than 10 employees, will be allowed to consult directly with employees. For some employers and in some situations, this will simplify the consultation process by removing the need for representatives and elections. 

As ever with the complex world of holiday entitlement and pay legislation, the devil will be in the detail. Perhaps those who have considered the consultation and drafted the response are now going to take a holiday…

We will be digesting the detail further in the coming days so watch this space for further updates from us on this topic. 

If you would like any more guidance or advice on holiday entitlement following this consultation, please contact Hannah Bollard