What's happening in employment law in 2024?

Holiday Headaches – irregular and part year workers

Changes apply from 1 April 2024 and applies to leave accrued after 1 April 2024.

The government has introduced reforms to simplify holiday entitlement and holiday pay calculations in the Working Time Regulations.

💡 A tip for those new to the holiday calculation game:

To check holiday pay, probably after you’ve thrown your calculator against the wall, use the .gov calculator.  Oh and remember, it’s always easier to work in terms of holiday hours than holiday days when it comes to part time workers.

Note that the Regulations from the pandemic that allowed for leave to be rolled over, have now been removed.

Method of calculation holiday for irregular worker and part year workers

Holiday entitlement for workers is calculated as 12.07% of actual hours worked in a pay period.

If your employees are paid monthly the pay period is the previous month. (Reverting to the way, it was calculated before the case law in relation to this; Harper v Brazel).

If an employee or worker is entitled to more that statutory holiday, the 12.07% calculation is different, check .gov for details.

Definition of an irregular worker: someone on a zero-hour contract or workers agreements whose hours are generally irregular or someone who works term time only and is only paid for the hours they work during the terms they work, rather than being paid on a monthly basis throughout the year.

Irregular workers leave calculations (maternity or family related leave)

The calculation method follows the same principle as the accrual method for statutory holiday entitlement as outlined above. However, to determine the number of hours worked, the new method introduces a 52-week relevant period of when a worker was working prior to them starting their family related leave.

Once you have calculated the number hours worked during this period divide by 52 to get the average hours. Again, .gov gives more details.

Carry over leave

1. If someone returns from Mat leave or family leave they can carry over their statutory 28 days holiday to the following year.
2. If someone on a ‘regular’ contract returns from sick leave, they can carry over up to 20 days of holiday. This much be used within 18 months, starting from the end of the leave year in which it accrued.
3. Part-time employees or those working irregular hours returning from sick leave can carry over up to 28 days of their unused leave entitlement. This includes both statutory leave and bank holidays (usually 28 days for full-time employees, pro-rated for part-time). The carried-over leave must be used within 18 months from the end of the leave year in which it accrued.

Rolled-up holiday pay explained

What is it?

Rolled-up holiday pay is an optional method for employers to calculate and pay the holiday entitlement of part-time and irregular hours workers. Instead of offering them paid leave days, employers can choose to include an additional amount in their regular salary. This additional amount represents the employee’s accrued holiday pay.

Key Points

• Who is eligible? Only part-time and irregular hours workers can have their holiday pay rolled-up.
• How is it paid? The additional amount is added to the employee’s regular salary and clearly identified on their payslips.
• Calculation: The amount is calculated by applying a 12.07% rate (as explained previously) to the total hours worked during the pay period.
• Reference period: A 52-week reference period is used to calculate the employee’s average pay before taking holiday leave, ensuring they receive the correct amount.

Can we apply this part way through a holiday year?

The following reforms will only apply to hoidlay leave years beginning on or after 1 April 2024:

• Introducing a method to calculate statutory holiday entitlement for irregular hours and part-year workers.
• Introducing a method to work out how much leave an irregular hour or part-year worker has accrued when they take maternity or family related leave or are off sick.
• Introducing rolled-up holiday pay as an alternative method to calculate holiday pay for irregular hours workers and part-year workers.

Therefore, if an employer’s holiday year commenced on the 1^st January 2024 they will only be able to introduce these changes from 1^st January 2025.

🎬 Action points

• Reviewing contracts: When reviewing contracts or handbooks, verify the employee’s contract type and confirm the correct method of holiday pay calculation is used.
• Checklist update: If you use a checklist for changing employees’ contractual terms related to hours or workdays, add a check for the holiday calculation method.
• Transparent communication: Inform employees if their holiday pay is rolled-up to avoid any confusion.

Fire and rehire 

Watch this space and clarification expected later this year.

This refers to dismissal and reengagement of the same employee on less favourable terms.

A new statutory code is being introduced.

Employment tribunals will have the power to apply an uplift of up to 25% of an employee’s compensation if an employer unreasonably fails to comply with the code.

It’s suggested employers contact ACAS at an early stage before any potential fire and rehire situation.

Employers must give their employees any information in relation to the process in writing.

The code will not just apply to redundancy situations, it will also apply to situations where the employer is considering this an option to avoid redundancy. It will also apply in situation where employers are seeking to change terms and conditions of employment.

There will be a requirement to consult for as long as reasonable possible. So, no designated consultation timescales as there are with redundancy.

During consultation employers will need to explore alternatives to avoid hire and fire and will need to demonstrate that there was a focus on reaching agreement

Fire and rehire should only be used a last resort.

TUPE (transfer of undertakings protection of employment) Consultation

Changes apply to TUPE situations that take place on or after 1 July 2024.

Businesses with less than 50 employees can consult with staff directly, IF there are no reps already in place. Also…

Businesses of any size, who are undertaking a transfer that will impact 10 or less employees can consult directly, IF there are no reps already in place.

Where employee reps are already in place, they will still need to be consulted.

Menopause

Menopause symptoms can be classed as a disability (Equality Act 2010).

Acas advises us that the menopause can also impact trans people and people with ‘variations of sexual development’. This could include people who are intersex so be considerate of this when wording policies/delivering training.

Acas says that employers should train and educate all managers, on the menopause so that workplaces can create a supportive and open environment to help women manage their symptoms. Acas suggests that a failure to do so could result in women becoming mentally unwell, having increased absence, losing confidence, or leaving their roles – this could be relevant for constructive dismissal claims.

Get training for your managers and HR teams here.

Failure to make reasonable adjustments could amount to disability discrimination, however discrimination relating to menopause can also be related to the protected characteristics of age, gender reassignment and sex.

🎬 Action points

• Include a policy within your handbook – inform staff you now have a policy.
• Training and awareness for managers.    
• Add to any guidance you have for managers undertaking return to work interviews after sickness or performance management meetings etc to ensure you minimise the potential for any claims.

Protection from redundancy after family leave (pregnancy and maternity)

Changes apply from 1^st April 2024

Employees returning from family leave who are at risk of redundancy must be offered a suitable alternative before other employees also at risk and should not be asked to ‘apply’ for roles.  

The changes apply to maternity leave, adoption leave and shared parental leave, not just maternity, despite headlines.

The length of protection varies slightly but generally is for 18 months from the date of birth/placement. Please do check, rather than assume as protection does vary.

There is also protection for employees who have suffered a miscarriage before 24 weeks (after 24 it’s considered a still birth, and maternity applies).

A failure to offer a priority employee a suitable alternative vacancy would mean the employee has a claim for an automatic unfair dismissal, which would mean a compensatory award that is not capped (and does not require two years’ qualifying service). In some cases, they would also have a claim for discrimination.

However, there is no guidance on what an employer should do if there are more employees with ‘priority status’ than there are jobs available.

🎬 Action point

Review any redundancy policy/managers’ guidance to ensure compliance. The cost of NOT being legally compliant is severe so take the time to ensure your managers and HR teams are aware of that. We don’t want anyone to get caught out simply because they didn’t know.