LEGAL & FINANCE Time to Prepare
Gill McAteer, Director of Employment Law at Citation, looks ahead to 2024 and the new legislation that will have the biggest impact on care home managers.
The new year is set to bring big changes to employment law, many of which will be particularly significant for the care sector. So far, however, news coming out of Westminster has been light on detail, leaving managers with little time to get their head around
new legislation, prepare updates to company
policies and contracts, and most importantly communicate and manage the changes with employees.
Knowing what’s set to change (and when) is an important first step, but it’s information that’s less accessible than it should be. Here are the changes we expect to have the largest impact on the sector.
CHANGES TO HOLIDAY PAY AND ACCRUAL
New employment regulations were published in early November and are set to come into force in early 2024. The most impactful of these updates for the care sector are changes to how holidays are accrued and paid. First, from 1 January 2024, the regulations will formalise many of the existing principles established in European case law concerning the calculation of holiday pay, and the right to carry holiday over into the next holiday year. This is largely a rubber-stamping exercise designed to preserve these rules when the supremacy of EU caselaw ends on 31 December 2023. Many businesses will already have compliant arrangements in place, but managers should review their policies to iron out any inconsistencies.
The regulations also introduce new rules designed to simplify the calculation and payment of holidays for people who work irregular hours or only part of the year. Businesses with holiday years starting from 1 April 2024 will now be allowed to pay rolled up holiday pay to these workers. This involves paying workers a top up of at least 12.07% on top of their normal pay as holiday pay rather than paying holiday pay when the worker takes time off.
Many employers find this an easier way to manage holiday pay for those who work irregular hours, but it has previously been unlawful as the practice was considered to be a deterrent to people taking holiday. It's a change intended to make it easier for sectors such as care to manage holiday pay calculations without detracting from workers’ rights.
The new rules make it clear that this is just an option for employers and it will be down to individual businesses to decide whether to make the switch. If they do, an understanding of how the new rules should be applied and the contractual changes they will require (and the consultation process necessary to introduce such changes) will be key. Employers should also consider transitional provisions in contracts for workers taken on between now and the rules
- 32 - “The coming changes to
employment will have a serious impact on the care sector, more so than most given the ubiquity of irregular and part-year work.”
Another new measure being introduced by the regulations comes in the form of how those working irregular hours or part of the year accrue holiday. For holiday years beginning on or aſter 1 April 2024, these workers will accrue for holiday on the last day of each pay period at the rate of 12.07% of the number of hours they worked during that pay period. This will apply from the start of their employment onwards, meaning that the rules regarding accruing holiday as you go will apply for irregular hours workers permanently, not just for the first 12 months of employment. However, employers can decide to continue with current practices and they should think carefully before bringing their contracts in line with this change given the impact it would have for those who may work irregular hours but have long service with the business and may need to take holiday early in the holiday year.
CARER’S LEAVE
Carer’s leave is one of several new employment rights managers will have to navigate next year. This took a step closer to coming into law with the passing of the Carer’s Leave Act 2023 (Commencement) Regulations 2023 on 1 December, officially bringing the Carer’s Leave Act into force on 4 December. More detailed regulations setting out rules regarding this new right will be published in advance of its anticipated enforcement
www.tomorrowscare.co.uk
coming into force for their business – if you have a January to December holiday year, the right to pay rolled up holiday will not apply until January 2025.
Whatever their situation, managers should tread carefully with rolled up holiday pay, and the effect it could have on employees’ willingness to take time off. Employees are still entitled to their time off, even if they aren’t being paid while they’re off, and they should still take it. Managers need to ensure that rolled up holiday pay doesn’t deter people from taking time off as the right to holiday is primarily health and safety legislation. Likewise, employees are still entitled to rolled up holiday pay when they are off sick or on statutory family leave, so managers need to be aware of how to calculate and apply this.
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