On 12th January, as a result of the Supreme Court decision in Harpur Trust v Brazel, the Government launched a consultation on how holiday entitlement for part-year and irregular hours workers should be calculated.
Last year, the Supreme Court ruled in Harpur Trust v Brazel that part-year workers are entitled to a larger holiday entitlement than part-time workers who work the same total number of hours across the year.
In order to address the disparity and confusion, the Government has issued a consultation paper to ensure that holiday pay and entitlement received by workers is proportionate to the time they spend working. The proposal is to replace the 52-week reference period when weeks in which no remuneration is earned are ignored, with a 52-week reference period which includes weeks with no remuneration.
The consultation seeks the views of various sectors, including agency workers who have complex contractual arrangements, to understand the implications of the judgment. The Government wants to ensure that any changes it considers do not have any adverse impacts on other parts of the legislation. It is calculated that this change will save businesses £113m per annum.
The consultation closes on 9 March 2023 so watch this space! This promises to be a significant development for holiday pay and one which most employers will need to pay close attention to.
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This is not legal advice; it is intended to provide information of general interest about current legal issues.