Navigating New Waters: Understanding the Impact of Recent UK Employment Law Reforms for Business Owners

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Embracing Change: A Guide to the Latest Employment Legislation

As business owners, staying ahead of the latest legislative changes is crucial to ensure compliance and foster a healthy workplace. The UK government’s recent response to consultations on reforms to retained EU laws and the recalibration of annual leave entitlements for part-year and irregular-hours workers and other legislation is significant. 

This article, prepared by the HR experts at HR Team, provides insights and guidance to help you stay compliant and informed about the latest employment legislation changes in the UK.


Rolling With Rolled-Up Holiday Pay

  • What’s New: Rolled-up holiday pay is making a comeback but is explicitly tailored for irregular hours and part-year workers. This pay must now be calculated based on total earnings in the pay period.
  • Impact on Your Business: If your workforce includes zero-hour or part-year employees, you’ll need to adjust your payroll processes. This approach ensures that these workers receive fair holiday pay proportional to their earnings, promoting a more equitable workplace.


Calculating Leave for Flexible Workers

What’s Changed: Annual leave for irregular hours and part-year workers will now be determined using an accrual method, calculated at 12.07% of hours worked per pay period. This move overturns the previous Harpur Trust v Brazel decision.

Business Implications: This change demands a shift in how you calculate leave for certain employees. It’s a move towards a more transparent and fair system, ensuring leave is proportionate to actual hours worked. This might mean updating your HR systems to accommodate these calculations.


Defining the Workforce

The Update: The terms “irregular hours worker” and “part-year worker” are now legally defined. This clarity will also apply to agency workers fitting these definitions.

For Your Business: Clarity in definition means easier categorisation of your workforce. This helps in applying the correct leave entitlement rules, reducing the risk of legal complications.


Leave Accrual and Carry Over

New Developments: The EU law on carrying over annual leave during maternity/family leave or sick leave is retained, protecting employee rights. A method for accruing annual leave during these periods for irregular workers is also introduced.

Your Action Plan: Ensure your HR policies are current with these provisions. It’s about respecting employee rights while maintaining clear records and procedures.


The End of COVID-Related Provisions

What to Know: The emergency annual leave rules from 2020 are being phased out. From January 2024, standard rules resume, with a carry-over of 1.6 weeks allowed with a written agreement.

Adapting Your Business: Prepare to transition back to pre-pandemic leave policies. Ensure any accrued ‘Covid carry over leave’ is managed appropriately by the March 2024 deadline.


Record Keeping Simplified

Change in Practice: Employers only need to keep records of weekly, not daily, working time, overturning a previous ECJ decision.

Impact on Operations: This simplifies your record-keeping obligations, allowing for more streamlined processes and potentially reducing administrative burdens.


TUPE Simplified for Small Businesses

What’s Different: Smaller organisations can now consult directly with employees in a TUPE transfer scenario, bypassing the need for elected representatives, though this remains an option.

Strategy for Small Businesses: This change offers more flexibility and potentially faster processes in employee consultation during transfers, especially for smaller enterprises.


Staying Ahead in a Changing Landscape

These legislative updates signify a shift towards greater clarity and fairness in employment law, particularly for those in flexible working arrangements. 

As a business owner, adapting to these changes ensures legal compliance and reflects a commitment to a fair and transparent workplace culture. Keep your HR policies updated and seek professional advice to navigate these changes smoothly.

HR Team’s consultants become your invaluable asset. With a deep understanding of the latest reforms, from rolled-up holiday pay to adjustments in leave calculations, our experts tailor HR consultancy that fits your business needs. We don’t just offer advice; we provide a roadmap for seamless integration of these changes into your existing practices, ensuring minimal disruption and maximum benefit.

Contact HR Team today to make these changes work for you.

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