Retained EU Law Reforms consultations: government's response

On 8 November, the Department for Business and Trade published its response to the Retained EU Law Reforms consultations, which also includes the response to the separate consultation on calculating holiday entitlement for part-year and irregular hours workers. 

The BRC has submitted responses to both EU Retained Law reforms and the holiday pay consultations in due course.

Government’s response covers three areas:

• Record keeping requirements under the Working Time Regulations (WTR)   
• Simplifying annual leave and holiday pay calculations in the Working Time Regulations,   
• Consultation requirements under the Transfer of Undertakings (Protection of Employment), or ‘TUPE’, Regulations. 

According to government, the reforms aim to reduce bureaucracy, reduce reporting requirements and simplify holiday pay calculations and TUPE transfer, while safekeeping employment rights.

Record keeping 

The consultation sought views on record keeping requirements, with a special focus on the CJEU Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE judgment (CCOO judgment), which held that objective, reliable and accessible records need to be kept in relation to the right to minimum daily rest breaks, weekly rest periods, and the limit on the maximum weekly working time, beyond the requirements of the WTR. 

Government has decided to remove the effects of the CCOO judgment, while maintaining record-keeping requirements from the Working Time Regulations. 

Holiday pay calculations

The government has confirmed that will not introduce a single annual leave entitlement. According to government analysis, this would only be beneficial if we had a single rate of holiday pay.

As it stands, government’s intention is to maintain the two distinct ‘pots’ of annual leave and the two existing rates of holiday pay so that workers continue to receive 4 weeks at normal rate of pay and 1.6 weeks at basic rate of pay.

Government will legislate to clarify what should be considered normal remuneration. In this way, employers will continue to be able to use existing payroll systems.

When looking at roll-up holiday pay, this will be introduce to irregular hours workers and part-year workers only, which would include some agency workers.

The government will also legislate to introduce an accrual method to calculate entitlement at 12.07% of hours worked in a pay period for irregular hour workers and part-year workers in the first year of employment and beyond. Other workers will continue to accrue annual leave in their first year of employment as they do now by receiving 1/12th of the statutory entitlement on the first day of each month and to pro-rate it thereafter.

Government will also restate various pieces of retained EU case law to retain workers’ overall level of protection and entitlement in relation to carry over of annual leave when a worker is unable to take their leave due to being on maternity/family-related leave or sick leave and introducing a method of accrual of annual leave for irregular hours and part-year workers when they have had other periods of maternity/ family related leave or sick leave.

For a full description the forward plan, please refer to pages 32-34 in this document.

Transfer of Undertakings (Protection of Employment) Regulations (TUPE)

Government will reform TUPE regulations to allow small businesses (with fewer than 50 employees) undertaking a transfer of any size, and businesses of any size undertaking a small transfer (of fewer than 10 employees) to consult their employees directly if there are no existing worker representatives in place. Where employee representatives – including trade unions – are in place, employers will still be required to consult them.

The full consultation response can be found here, and government will legislate to introduce reforms to record-keeping requirements under the working time regulations, annual leave and holiday pay calculations in the working time regulations, and consultation requirements under the Transfer of Undertakings (Protection of Employment) regulations (TUPE).