New Year, New… Regulations! A resolution to the Harpur v Brazel Holiday Pay Ruling

In what is expected to be very welcome news to employers, new Regulations have come into force this month transforming statutory holiday provisions. The Regulations, in part, aim to correct the anomalies arising from the Harpur v Bazel ruling.

Key changes, outlined below, apply only to irregular hours workers, such as exam invigilators and peripatetic workers, and part-year workers, such as those engaged on a term time only basis.

New Accrual Rate

The new Regulations legalise the accrual of annual leave for irregular hours and part-year workers at a rate of 12.07%.

This, essentially, reverses the decision reached by the Supreme Court in Harpur v Brazel, ensuring that annual leave is accrued in proportion to the hours actually worked.

Rolled-up Pay

The new Regulations have also legalised the payment of rolled-up holiday pay. This practice, referring to the ‘rolling up’ of holiday pay together with basic pay, was previously ruled to be unlawful by the European Court of Justice with concerns raised that such a practice could discourage individuals from taking leave.

This new practice is not mandatory, however, if utilised, the following requirements must be met:

1. The receiver must be either an irregular hours or part-year worker;
2. Holiday pay should be calculated at 12.07% of pay for work performed;
3. The additional 12.07% payment must be paid at the same time as the pay for work performed;
4. The individual’s payslip must itemise the holiday pay separately.

Whilst the Regulations, named The Employment Rights (Amendment, Revocation and Transitional Provision), are in force, it should be noted that the above provisions will only apply to leave years commencing on or after 01 April 2024.

Should you need any further guidance, or wish for your current contractual arrangements to be reviewed in light of the above changes, please contact the team at getintouch@justpeoplehr.com