The Working Time Regulations (WTR) provides that workers are entitled to 5.6 weeks’ annual leave per year. However, this holiday entitlement is split into two allocations:
- 4 weeks’ leave as required by Regulation 13 leave; and
- 6 weeks’ leave Regulation 13A leave.
Different rules about pay apply to Regulation 13 leave and Regulation 13A leave. ECJ caselaw has made it clear that workers must be paid their “normal pay” for Regulation 13 leave. In contrast, workers are only entitled to be paid basic pay for their Regulation 13A leave (although employers may elect to pay normal pay for Regulation 13A leave if they wish and, indeed, many do).
The government has decided to amend the WTR to spell out which types of payments count when determining pay for Regulation 13 leave. These are:
- payments, including commission payments, which are intrinsically linked to the performance of tasks which a worker is obliged to carry out under the terms of their contract;
- payments for professional or personal status relating to length of service, seniority or professional qualifications; and/or
- other payments, such as overtime payments, which have been regularly paid to a worker in the 52 weeks preceding the calculation date (it does not expressly state whether voluntary overtime payments should be included, however, if they are “regularly paid” to a worker then we think they will probably count).
Employers should have already incorporated these types of payments into their calculation of Regulation 13 holiday pay.
From 1 January 2024, workers will not be able to carry over any accrued Covid-related Regulation 13 leave. Workers will have until 31 March 2024 to use up any Covid-related leave that was accrued before 1 January 2024.
On top of this, the Government has decided to amend the WTR to clarify when workers may carry over accrued leave in other circumstances.
This provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, we cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
