There have been a lot of articles in the press recently around the subject of holiday pay.
Many have covered a very important Supreme Court case, Harpur Trust v Brazel 2022, which essentially threw the whole subject of holiday pay, especially for “variable” or “irregular” employees, into a state of chaos.
In fact, so much chaos that the Government has reacted very quickly with new regulations that essentially overrule the decision in that case.
But what has not been so widely covered is that while the regulations come into force on 1st January 2024, they will not apply to anyone whose holiday year starts before 1st April 2024, in other words four months later.
So much of the immediate editorial that was produced has put employers into a flat spin on how to treat employees who fall between 2023 and 2024 in terms of their holiday year. So, employers can relax, if that is the right word, safe in the knowledge that we will be briefing them fully on holiday pay in the New Year, in preparation for their next full holiday year. If any organisation has a holiday year that starts on 1st January 2024, they will have a full year to prepare, as they will not have to implement any changes until January 2025.
So, all of your payroll staff can go away for the Christmas break safe in the knowledge that the model created by Harpur v Brazel will continue for some time yet, but at least they have some sort of idea of what they are doing.
The new rules, which are much simpler, will not come into force for at least four months. We will write more fully about what to do with holiday pay for workers that work variably or irregularly in the New Year. We will also cover this topic on our next free Webinar on Thursday, 18th January at 10.50 a.m., so please make sure you join us then.
The guidance provided in this article is just that – guidance. Before taking any action, make sure that you know what you are doing, or call an expert for specific advice.
