VWV to Publish Template Holiday Pay Consultation Response
We reported last week on the Government's new consultation on holiday pay entitlement for permanently retained part-year and zero hours staff, including some agency workers.
After last week's report, we are now working to prepare a template response to the consultation, which we will provide for employers to populate and submit.
What is the Consultation Proposing?
The Government is proposing to pro-rate the statutory holiday entitlement of permanently retained part-year and irregular hours workers, in proportion to the total annual hours they have worked. The proposal comes in direct response to the Supreme Court's judgment in the Brazel case, which found that the current law didn't contain any basis on which to pro-rate holiday for part year working.
The overall aim of the consultation seeks to reintroduce a pro-rating mechanism for part-year and irregular hours workers. However, some of the detail of the consultation is complex and requires detailed consideration before a response is submitted. For example, the Government's current proposal is to introduce a 52 week fixed reference period (which will include unworked weeks) in order to calculate holiday entitlement. On the face of it this appears to be a simple solution, but it has potential implications including for staff in their first and last years of employment and staff whose hours change from year to year.
The Government also wants to take this opportunity to clarify how much holiday should be used for 'one day' off work, in particular where working hours vary. The Government acknowledges the limitation of the 'flat average working day' method it proposes in the consultation. There may be an opportunity to suggest a more straightforward solution based on our knowledge of the kinds of issues employers face in practice.
VWV's Template Response
We are carrying out a detailed review of the consultation and the proposals contained within it. We will prepare a template response which we will make available for employers to populate, tailor and submit before the consultation deadline of 9 March 2023.
