Employment: Changes to holiday pay, TUPE and flexible working

Draft regulations are now in place following last year’s government consultation into the reform of holiday pay and entitlement, together with the TUPE (Transfer of Undertakings (Protection of Employment)) regulations. The key information is set out below.

Holiday Pay

All businesses who only employ workers seasonally, or for limited periods in a year (as is often the case in the agricultural sector) will now need to calculate holiday pay for workers who work irregular hours or part of the year as follows:

• 12.07% of earnings in a pay period will amount to their statutory holiday pay entitlement
• for example, if you employ an individual for one month, you may effectively use ‘rolled up’ holiday pay at the rate of 12.07% of the pay they have received for that month. This, however, only applies to irregular hours workers, part year workers and some agency workers
• all other workers will continue to accrue 1/12th of their statutory entitlement on the first day of each month to be pro-rated thereafter.

This should make the calculation of holiday pay for seasonal / irregular hours workers more straightforward.

TUPE

Following the consultation, the TUPE regulations will change, in our view, beneficially for employers. A business with fewer than 50 employees need not appoint employee representatives in a TUPE situation to carry out consultations but can instead consult directly with the affected employees.

In addition, where there are no existing employee representatives in place and there are, or are likely to be, fewer than 10 employees transferring, businesses of any size will be permitted to consult with the affected employees directly.

These changes seem sensible and pragmatic and will reduce the burden on employers in certain TUPE situations as the need to elect representatives will be avoided.

It is important to ensure thorough consultation processes are completed and necessary statutory timescales met in TUPE situations.

Is your organisation ready for the changes to flexible working?

The new Flexible Working Act is expected to come into force this summer. The key changes to be introduced are as follows:

1. Employees will be able to make two flexible working requests (increased from one) in any 12 month period.
2. There is no longer a requirement for the employee to explain the impact of their requests.
3. Employers must consult with an employee before rejecting their request.
4. Employers must provide a response within two months of the request, (reduced from the previous three month period), unless a longer time period is agreed by both parties in writing.

ACAS is compiling new guidance for employers in relation to these changes given the likely increase in requests under these new rules.

Next Steps

Businesses should review their current flexible working policy now and/or provide a written policy if they do not already have one. It would also be wise to update managers and consider training as well as being prepared for an increase in requests.

For further assistance, please contact the Michelmores Employment team.