New Employment Rights Regulations
Employers need to be aware of the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, which came into effect on the 1st January 2024.
Intended to make employment legislation less onerous for businesses and easier for employees to understand, they reduce record-keeping requirements under the Working Time Regulations, simplify annual leave and holiday pay calculations, and streamline TUPE consultation requirements.
Here is a more detailed overview of each:
Working Time Regulations (WTR)
To comply with Working Time Regulations 1998, employers must keep adequate records of maximum weekly working time, rest breaks and the duration of night work. EU law also required employers to record the hours worked each day by each employee. With the latter seen as overly burdensome, the new regulations no longer require daily working hours to be recorded provided compliance with WTR can be demonstrated in other ways.
Annual Leave and Holiday Pay
The new regulations are designed to ensure that workers have a clearer understanding of their holiday entitlement; that entitlement is more closely aligned to the hours worked throughout the year; and to make it easier for businesses to calculate holiday entitlement for those working irregular hours.
While there are no changes to how regular-hours workers accrue annual leave, from 1 April 2024, irregular-hours and part-year workers’ annual leave entitlement will be calculated at 12.07% of the hours worked in each pay period. Additionally, when calculating these workers' maternity or family leave entitlement, employers can now use the previous 52-week reference period to determine the average hours worked, ensuring any leave given is proportional. This calculation will include weeks they were employed but didn’t work but will not include weeks spent on statutory leave.
Another change is that holiday pay can now be provided as an extra on each payslip instead of being paid during holidays. Known as rolled-up holiday pay (RHP), implementing it is the choice of the employer, workers are not entitled to it. If adopted, holiday pay will be calculated at 12.07% of an employee’s total earnings within a pay period. To avoid confusion, employers are advised to make clear on each payslip which part is normal pay and which is RHP. Those receiving RHP should also understand that they won’t be paid if they take holidays.
The final change affecting holiday leave is the repeal of the Covid Regulations. This means from 1st January 2024, employees can no longer accrue Covid carry-over leave. Additionally, those who have accrued Covid carry-over leave must take it by 31st March 2024. However, there is no change to the right to carry over 1.6 weeks of annual leave.
TUPE
The TUPE regulations safeguard employees' rights in situations where the company they work for is taken over by a new owner or changes hands, and/or when the service they are involved in is moved to a different provider. At present, the existing and new employer have to consult with the workforce in advance of the TUPE transfer taking place. This must be done with the workers’ existing representatives or, if there are none in place, a representative must be elected for the consultation process.
For companies with fewer than 50 employees or where the transfer involves 10 or fewer workers, 1 July 2024 will see changes come into effect that allow employers to consult directly with employees instead of with their representatives. This means that if representatives are not already in place, the need to elect new ones will not be necessary, thus making transfers easier and quicker for smaller businesses.
Overall, the Regulations are intended to make things easier and clearer for both employers and employees. However, if you need advice about these or any other legal matter affecting your business, Wilkinson Woodward is here to assist.