Annual leave and holiday entitlement

As employees look to begin planning their annual leave for the year ahead, there are some fundamental changes to holiday entitlement that HR teams must be aware of. Our senior solicitor, Arwen Makin, spoke to CIPHR recently, to look at what these alterations mean for the sector.

The government’s ‘Good Work Plan’ set out key changes with respect to holiday pay, deriving from recommendations made by the Review of Modern Working Practices (the Taylor Review) published in July 2017.

Holiday pay entitlement

The government has said it will launch a campaign to boost awareness of holiday pay and rights among employers and individuals. This will include new guidance – produced in conjunction with Acas – with real life examples to support the interpretation of holiday pay rules.

This is likely to have a significant effect because, while employment lawyers and HR professionals understand the obligations surrounding annual leave, many employees and workers remain in the dark. The general election may affect this, but it is likely to go ahead in some form or another.

Changing the reference period

The government has already committed to increasing the reference period for determining an average weeks’ pay from 12 weeks to 52 weeks. This aims to assist workers who do not have a regular working pattern throughout the year, or whose income varies significantly on seasonal commission.

Typically, these are workers which have previously suffered as a result of having to take their holiday at a quiet time of the year, resulting in a lower weekly pay-rate being calculated for their annual leave.

For workers who have not worked for 52 weeks, the entire period of service will be considered. This change will result in a true average for all workers and will mitigate the effect of seasonal fluctuations, which may be easier for HR teams to manage.

Political developments aside, 2020 looks set to shake-up some key areas of employment law practice – and procedure and HR teams will need to be on their toes to ensure they keep pace with change.


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