ONLINE LEARNING
FEATURE TOPIC
Holiday pay and leave
can stand the test of time in the current economic climate, I’m unsure. NT: Yes, that does happen. We had a succession of legal rulings over about a decade which gradually brought more and more items of pay into scope. I think it got to the point where many employers concluded that everything would eventually need to be included, so they implemented that in their holiday pay calculations to negate the need to make continual changes. It’s not universal, of course. Employers in price-sensitive sectors (where wage costs are a high proportion of the cost of running the business) need to keep those costs to a minimum, to stay competitive. These employers will only include items of pay which they’re required to consider. government will have to replace the current regulations to create a single holiday entitlement and set out the minimum holiday pay rate” Do you think the Retained EU Law (Revocation and Reform) Bill 2022 consultation, which explores holiday pay rules, will lead to simplification at last? BP: It has to! Merging the four-week statutory and the additional 1.6 weeks’ holiday would at last mean they’re subject to the same rules regarding the calculation and right to carry over etc. Having said that, it’s arguably the most radical proposal, as the government will have to replace the current regulations to create a single holiday entitlement and set out the minimum holiday pay rate. It could also leave employers facing additional costs if based on ‘normal / usual pay’. In my opinion, making it lawful for employers to pay rolled-up holiday pay is controversial as the proposal currently relates to all workers. This might act as a deterrent to employees working “It’s arguably the most radical proposal, as the
regular hours against taking leave, as holiday pay would be included in their normal pay, which could then impact an employer’s health and safety obligations towards them. This method might be more relevant to those who work irregular hours, for instance, an exam invigilator. I also believe that ‘usual pay’ needs an absolute definition – for instance, contractually entitled to. The proposal to change the calculation to include non-working weeks in the reference period will be more reflective of the actual hours an employee has worked, plus it will minimise the administrative burden on employers. LS: Eventually. However, all legislation remains grey at times and employers can only do their best to interpret what they have at each moment in time. Strong guidance is needed if employers are to stand a chance of remaining compliant. SO’S: I’m glad the Department of Business and Trade (DBT) has revisited the holiday entitlement and pay calculation proposals, especially following on from the previous consultation published earlier this year. I believe that, with our members’ feedback as to how these proposals could work in practice, we could be getting closer to a simplified calculation which would assist employers and employees alike. The CIPP has responded to the above consultation with our members’ thoughts and feedback. You can view our consultation response here: http://ow.ly/ Na4850OFSTg. NT: It could certainly simplify things, not least by bringing all 28 days of holiday under the same set of rules. However, in the UK we tend to complicate things rather than simplify them when we change the law, so we’ll have to wait and see what happens. The proposal to re-introduce the concept of rolled-up holiday pay is particularly interesting. There are pros and cons to this from the perspective of both the employee and employer, so it won’t be taken up by everyone. It will, however, give an additional option which might alleviate current complications, for instance, in cases where people work on a very occasional basis and there really is no concept of taking a holiday. n
Duration One half day
CPD 3 points
Case law continually produces changes to employees’ statutory holiday leave and pay entitlement, which are covered in this informative course, along with the various types of leave and the calculation of pay.
Visit cipp.org.uk/training to book your place
| Professional in Payroll, Pensions and Reward | July - August 2023 | Issue 92 42
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