Our response on retained EU employment law reforms

Reducing the administrative burden of the Working Time Regulations

72 per cent of employers surveyed disagree that the government should legislate that employers do not have to record daily working hours. Employers feel that although removing this requirement would reduce administrative burden, recording daily hours worked provides employers and employees with clarity and visibility, particularly with overtime. This is to ensure employers have appropriate measures in place to ensure the health and safety of their staff is maintained. Employers are currently able to easily record and manage this using existing employee software.

Proposal 1: Holiday pay and entitlement reforms

Create a single annual leave entitlement of 5.6 weeks

64 percent of employers surveyed agree that creating a single statutory leave entitlement would make it easier to calculate holiday pay and reduce administrative burden. Employers feel it would remove any ambiguity especially when calculating leave entitlement for staff working irregular shifts.

The NHS has national terms and conditions (for both medical and non-medical staff) that provides a more generous holiday entitlement than the statutory minimum.  The minimum holiday entitlement is 27 days, increasing to 29 days after five years’ service and to a maximum of 33 days after 10 years’ service. Public holidays are provided in addition to annual leave.

Change to holiday pay rate

53 per cent of employers surveyed agreed that there should be one rate of pay to make it easier to calculate and reduce the administrative burden.

Employers surveyed stated the fairest option would be to pay holiday pay at the normal rate of pay. As the minimum holiday entitlement in the NHS is 27 days there would be cost implications that would need to be factored in if this were to be implemented.

Change to calculating leave in a worker’s first year of employment

The majority of employers surveyed felt they would not change current practices for calculating leave entitlement in the first year as a result of this proposal. Employers felt this may add complexity and be difficult to calculate, particularly when calculating entitlement if an employee leaves.

Changes to the rules relating to carrying over leave if they were unable to take it due to the effects of coronavirus. 

Although some employers did not see any consequences of removing the temporary legislation, it was highlighted that the NHS is still under pressure and some of the workforce may not have had the opportunity to take owing leave.

This may cause an influx of high volumes of leave being taken over a short period of time, therefore adequate advanced notice of changes to the regulations would be essential.

Proposal 2: Introducing rolled-up holiday pay as an option for employers.

The proposal would give employers a choice between using the existing 52 weeks holiday pay reference period and rolled-up holiday pay to calculate holiday pay for their workers with irregular hours.

Employers surveyed agreed that rolled up holiday pay should be introduced for non-substantive workers such as bank workers. However, it was highlighted that it may mean workers accrue more paid annual leave than substantive staff if large numbers of hours are worked.

Employers also felt that allowing the option to use rolled up holiday pay may also encourage presenteeism and would be a risk to safety and wellbeing especially in the current economic climate and the cost of living.

Would our existing payroll system be able to calculate holiday pay using the rolled-up holiday pay calculation as well as the 52-week holiday pay reference period?

Yes, however, the system may need to be amended to reflect the changes which will require adequate advance notice.