Legal update: Clarification on the definition of a “part-year worker” under new holiday regulations

We have an update for you on the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, which came into force on 1 January. As a reminder, these regulations:

 

1. Introduced new rules regarding holidays for irregular hour and part-year workers, bringing in two big changes for these workers:

• Changes to the calculation of holiday entitlement.
• Giving employers the option to pay rolled-up holiday pay.              

These changes came into force for holiday years starting on or after 1 April 2024.

2. Adopted certain principles from EU caselaw on the calculation of holiday pay and when holiday can be carried over. 

3. Brought an end to the COVID holiday carry-over rules. 

4. Changed some of the rules on TUPE consultation through elected representatives for transfers on or after 1 July 2024.

5. Clarified the extent of an employer’s obligation to keep records of working time. 

There was a big question remaining after these regulations were introduced, which we now have clarification on: What’s the definition of a part-year worker?

 

Clarification on the definition of a “part-year worker”

The Department of Business and Trade’s (DBT) holiday guidance controversially stated that part-year workers who have periods of at least a week during the holiday year where they’re not required to work but receive an annualised salary over 12 months wouldn’t be a part-year worker under the regulations. The reasoning for this was that there are no weeks where they don’t receive pay.

At the time, Citation’s Director of Employment Law queried this with the policy unit at the DBT. They confirmed the guidance was correct and said, “The policy was designed in this way so that teachers, and some other working arrangements, do not fall within the definition of a part-year worker”.

However, on 1 April, the government took a quiet U-turn on this by updating their holiday guidance to say:

“The regulations require that there must be a period of at least one week ‘for which they are not paid’, which means that it would still be possible for a worker to be paid ‘during’ that period; so long as there is no expectation of them working in that period and nor are they receiving payment ‘for’ that period.”

This means that where employees have at least one week where they’re not working, they’ll be treated as part-year workers – regardless of whether their pay is spread over the full 12 months. This means, you as an employer don’t have to worry about creating a period without pay just to fall within the scope of the regulations.

 

IMPORTANT: Your updated Employee Handbook is now ready in Atlas

We sent an email to you on 8th March to let you know we would be adding new information on Paternity Leave, Flexible Working and Carer’s Leave to your Employee Handbook (if you have documents created by us in Atlas). This is now ready to be distributed via Atlas to your team.

It’s worth noting that if you choose to distribute to ‘All’, this will go to everyone registered on Atlas. As these updates (and this handbook) don’t apply to workers, if you have a mix of employees and workers in your business, we recommend distributing the handbook by department. If any of your departments include workers, just select the employees that should receive this update. Any new employees will automatically receive this once they’ve been set up on Atlas.

 

If you don’t have documents created by us or if you have any questions about the update, please contact us for advice at hrdocuments@citation.co.uk.

 

Want to chat this through? Get in touch.

This is a subtle but significant change to the guidance, so we wanted to make sure we clarified it with you. If you’d like to chat this through with any of our experts, please call the 24/7 advice line on 0345 844 4848* and we’d be happy to help.

 

*Applicable for all clients who’ve purchased Citation’s HR & Employment Law and/or Health & Safety core service, including H&S and HR Workplace Expert. Please note that our H&S and HR Virtual Assistance clients have access to our advice line Monday to Friday 9am-5pm.