"The potential impact on payroll teams and future cashflow is huge, so our advice is to always plan ahead and start getting your house in order now to avoid being caught out. Our priority is to communicate to our customers and reassure them that we will support them through this change."
Government limits impact of holiday pay ruling
19 December 2014
The government has taken action to reduce potential costs to employers and give certainty to workers on their rights following the recent court decisions on holiday pay. This follows the Employment Appeal Tribunal ruling that holiday pay should reflect non-guaranteed overtime. The announcement says that the Government recognises the decision of the court and is taking action to protect UK business from the potentially damaging impact of large backdated claims. Changes made to regulations under the Employment Rights Act 1996 will mean that claims to Employment Tribunals on this issue cannot stretch back further than 2 years.
The CIPP has been involved in the task force discussions which have led to this announcement, and welcomes the certainty that this will now give to employers and their agents and bureaux.
We recommend the new CIPP training course on holiday pay and leave which will give members the up-to-date detail on this issue.
Acas guidance on calculating holiday pay
14 January 2015
Acas has updated their holiday pay guidance to reflect recent court judgements and the resulting change to regulations.
The Government has introduced regulations to take effect from 1 July 2015 to limit and clarify the maximum amount of back-dated holiday pay that can be claimed.
This means that the rules employers and workers follow to calculate holiday pay may need to be updated.
Guaranteed and normal non-guaranteed overtime should be considered when calculating a worker's statutory holiday pay entitlement but there is currently no definitive case law that suggests voluntary overtime needs to be taken into account. Commission should be factored into statutory holiday pay calculations. Work-related travel may need to be factored into statutory holiday pay calculations. A worker's entitlement to holiday pay will continue to accrue during sick leave. There are different rules for calculating holiday pay depending on the working patterns involved. Workers must take their statutory paid annual leave allowance and can only be 'paid in lieu' for this when their employment ends.
CIPP comment The CIPP are running a new training course on holiday pay and leave which will give
CIPP Policy News Journal
08/04/2015, Page 92 of 521
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