Calls to put 12.07% holiday pay calculation into legislation

The REC is backing the Department for Business and Trade’s move to put the 12.07% holiday pay calculation method into legislation.

The Recruitment and Employment Confederation supports the plans in order to lessen the unfairness and uncertainty in holiday pay rules

These came about after the Harper Trust v Brazel case outcome created confusion about whether employers of workers with irregular hours could continue to pro rata holiday leave entitlement as 12.07% of hours worked in the relevant pay period.

The REC believes that the 12.07% method should apply to all workers (as defined in the Working Time Regulations 1998) whose working patterns mean that there is no simple way to accurately calculate their holiday entitlement.

REC spokesperson, Lorraine Laryea, commented, “Our approach for all workers with irregular working hours will bring clarity for workers and businesses and ensure all workers receive holiday leave and pay that reflects their time at work.

“Agency workers who have complex contractual arrangements need a consistent and simplified method of calculating holiday pay and holiday leave entitlement. The government should make their suggested change retrospective to avoid accidental non-compliance.”

“We urge the government to go further and address the issues of Harpur Trust v Brazel as only one piece of the puzzle within a more comprehensive review of the Working Time Regulations.

“The government now has an unparalleled opportunity to fix problems with working time legislation more generally via the Retained EU Law (Revocation and Reform) Bill. We need modern legislation that reflects the rise of the gig economy and temporary working in general.

“It is outrageous that we don’t have working time provisions which are in keeping with the modern ways of work, which should provide a simple structure that employers and workers understand. This will ensure that workers receive their rights and employers are not unfairly penalised for inadvertently falling foul of outdated provisions.”

To find out more about contracting please contact Jaime on 01206 591 000 or email jaime.thorpe@contractorumbrella.com.