Archive
Month: December 2023
Changes to holiday pay from 01 January 2024 – part two
From 01 January 2024, holiday pay calculations will be simplified for those working irregular hours. Here’s what you need to know about how the new laws will affect your organisation.
‘Rolled-up’ holiday pay calculations – this will be permitted for those working irregular hours from 01 January 2024. If you want to roll up holiday pay for individuals working irregular hours (you don’t have to!) you will be able to uplift their hourly pay by 12.07% to take account for their holiday.
An example – an employee has worked 20 hours in one pay period (such as a month) at a rate of £12 per hour. You want to include payment for holiday accrued during that period (rolling up their holiday). From 01 January 2024, you can pay them £268.97 for that pay period (which includes an uplift of 12.07% on the £240 they would have otherwise been due).
This update is accurate on the date it was published, but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.
Changes to holiday pay from 01 January 2024 – part one
If your workers’ and employees’ pay varies (perhaps due to commission, overtime or something else) new laws from 01 January 2024 will affect your organisation. Here’s what you need to know.
First four weeks’ holiday pay – from 01 January 2024, holiday pay for the first four weeks of holiday taken by workers and employees with variable pay must be calculated to include overtime, commission, and payments for length of service, seniority or professional qualifications.
Remaining holiday pay – any holiday pay in excess of four weeks will not legally need to include the variable elements of pay (such as commission and overtime). Of course, you can choose to include variable elements for all holiday pay calculations if you want to avoid the admin burden of splitting it out.
Case law – tribunal decisions already meant that holiday pay should be calculated in accordance with what this new law requires, but this is the first time we’ve seen it set out in legislation. Many employers have, until now, taken a view as to whether to calculate holiday pay in this way.
Penalties – those who ignore the law from 01 January 2024 can expect potential claims for unlawful deductions from wages. These claims can go back as far as two years.
Get in touch if you require our advice and guidance on the changes and how they’ll impact your organisation directly.
This update is accurate on the date it was published, but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.
Avoiding chaotic redundancy consultation
A new Employment Appeal Tribunal (EAT) case is a reminder of the importance of good consultation during a redundancy process.
Background
The claimant (and his colleagues) were not consulted about redundancy proposals. The employer started their processes with pooling and scoring. The claimant’s dismissal was unfair due to the lack of early consultation about the redundancy proposals (amongst other reasons).
Practical takeaway
Start early – this case is a reminder that you should start consultation at an early stage, ensuring enough information is being provided and enough time is given for employees to respond (and for those responses to be considered carefully).
Correcting the past – interestingly, the EAT held that the employer’s appeal (held at the claimant’s request) could not correct the lack of consultation which should have happened with the workforce at a much earlier stage.
Purpose of consultation – the case again reminded that consultation should be all about avoiding dismissals or reducing the impact of redundancies. The lack of early consultation meant this was not possible, therefore making the process unfair.
Get in touch if you’re having to consider making redundancies – we’ve got solutions to support.