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Sarah Everton from Employment Law team

Sarah Everton

Head of Employment Law

01782 525012 sarah.everton@myerssolicitors.co.uk


Reform of holiday rights: what employers need to know

29th May 2024

Reform of holiday rights: what employers need to know

Calculating holiday allowances can be tricky for any staff who work irregular hours.  In an effort to simplify things, this year the government has introduced changes to the rules on holiday rights as part of reforms to some employment rights that developed from years of European and UK case law.

‘These changes were made following consultation, with the stated aim of simplifying the rules on holiday entitlement and pay,’ says Sarah Everton, Head of the Employment Law team with Myers & Co. ‘They also address the potential unfairness of a Supreme Court decision that gave a term-time worker more holiday when compared to someone who worked all year round for the same number of hours each year.’

Sarah Everton highlights the changes and the importance of complying with the new rules as well as outlining the benefits, and how and when to take advantage of these.

What are the new rules?

Many of the new regulations clarify existing requirements, although there are some significant new rules.

Employers need to be aware of:

Ensuring compliance

While the changes do provide some clarity and simplify some areas, holiday rights remain complex. Now is a good time to take stock and ensure that you are compliant, for example by determining which payments are included in holiday pay calculations and over what period of time the average is worked out. A worker can bring an employment tribunal claim for past shortfalls in holiday pay.

Advantages of the new rules

The option to pay rolled-up holiday pay to irregular hours and part-year workers is simpler than calculating holiday pay based on average pay over the previous 52 weeks.

Given the complexities of alternative methods, many employers continued to use rolled-up holiday pay for casual and zero-hours contract workers even though it was technically unlawful. Where employers are able to use the new rules, this will remove the possibility of being challenged for paying rolled-up holiday pay.

How and when to take advantage of the new changes

Employers wishing to adopt the rolled-up holiday pay option can only do so:

Now is a good time to assess if you can and wish to use the new rules. We can support you in taking steps to implement the changes. Remember that this may involve changes to contracts, which usually involves the worker’s agreement.

Practical steps for employers

It is important to:

How we can help

While the changes go some way to simplifying the rules on holiday entitlement and pay, they also bring in differences between the rules that apply to irregular hours and part-year workers and those that apply to other workers, for example overtime payments and allowances should be included in calculating holiday pay. Another area of complexity is ‘carry forward’: there are variations in the amount of holiday that can be carried forward and for how long, depending on the circumstances.

To support you, we can:

For further information, please contact Sarah Everton in the employment team on 01782 525012 or email sarah.everton@myerssolicitors.co.uk.  Myers & Co has offices in Stoke-on-Trent, Staffordshire.