PART 1: DATES, DEFINITIONS AND OBLIGATIONS
Since 2012 there have been a series of ET, EAT and EU employment cases involved in determining the correct method of calculating holiday pay for employees whose pay is made up of non-recurring or intermittent elements of pay. From April 2020 the reference period for calculating holiday increased to 52 weeks (was 12 weeks). The Employment Rights (Employment Particulars and PaidAnnual Leave) (Amendment) Regulations 2018 have made this change to ensure that seasonal and other similar workers can receive their full entitlement to leave and pay. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS In a ruling in the Brazel v Harpur Trust, Court of Appeal case, the court ruled that a music teacher who had a zero hours contract and no holiday period work was a “part year” worker and as such her holiday had to be calculated in a different manner to the one normally applied to “term time” workers, where the standard calculation is holiday based on an equivalent of 12.07% of annual hours worked. The teacher’s new calculation is a 12 week average of her actual hours worked, which works out as an equivalent of 17.5% of annual pay. Whilst not being in any way unique, this is nevertheless uncommon; however, theACAS guidance on the calculation requirements has been updated since the court’s decision was made. The rules to apply to the calculation of holiday pay will continue to come under the spotlight because in general all of the legal decisions made have applied only to the primary period of paid annual leave, four weeks. Whilst it remains to be seen just how much more of a workers pay will be brought into use in pay calculations how much all of this will have to apply to the additional 1.6 weeks and to any additional contractual holiday entitlement. Further cases are likely both on the amount of pay to include and the extent of the calculations. An exemption, abolished from 6th April 2013, that allowed employers to provide a breakfast tax and NICs free to employees cycling to work on designated ‘cycle to work’ days to encourage participation in the scheme. Golden Hellos/Carrots/Parachutes Payments made to an individual as an incentive or inducement to commence employment or leave employment are fully taxable and subject to National Insurance contributions (NICs). No printing, copying or reproduction permitted. INCENTIVE SCHEMES Cyclists’ breakfasts Where paid before commencement of employment they should be included in the first available payroll run following commencement. Golden Handcuffs Incentive, bonus payments or share issues linked with an agreement tying the employee into a contract of employment of a fixed minimum period, usually a number of years. Honoraria Payments made to an office holder by the organisation with which that office is held, or paid voluntarily by an employer to an employee who holds an office with a separate organisation (e.g.
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