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Changes to TUPE with holiday pay laws on the way

November 17, 2023
Employment Law

Back in the Summer, we reported on Government plans to change the laws relating to holiday pay and business transfers. So what’s the latest news on when these changes might come into force?

A brief reminder of the changes

The main changes previously suggested by the Government are as follows:

  • Firstly, the Government is planning to allow employers to pay holiday pay as part of a ‘rolled-up’ rate of pay. This approach is particularly useful when dealing with irregular hours workers and/or those who only work for part of the year. Presently, employers who pay a ‘rolled-up’ rate of pay (sometimes called the ‘12.07% method’) run the risk of being found to be in breach of the strict wording of the Working Time Regulations 1998. This change in the law will legitimise the practice. 
  • Secondly, for businesses with fewer than 50 employees, and in any event for TUPE transfers involving fewer than 10 employees, employers will no longer have to consult with elected employee representatives. Instead, in most cases, they will be permitted to consult directly with the affected employees themselves.

As we noted in the Summer, these appear to us to be sensible and pragmatic changes to the law which should make lives simpler for both employers and employees.

Not too long to wait!

The draft regulations which would formally introduce these new laws (‘The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023’) have been published in the last few days. All things being equal, they should come into force on 1 January 2024.  

Want to know more?

If you would like to know more about how these changes might affect you and your business, please get in touch.

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