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Finally Solved: Easy Holiday Pay Calculations for Zero-Hour and Part-Year Employees!

At long last the holiday calculations for zero hour and part-year workers has been resolved.

What is the history?

If you have been reading our blogs, heard Jemma speak in one of her many Employment Law talks or have been following Employment Law in general you are probably aware of a case called Brazel v Harper Trust which sent employers and HR Professionals across the UK into a spin. 

We all knew that the Harper Trust rule didn’t make sense and meant that those staff on zero-hour contracts and part-year workers would end with more holiday than permanent staff and it was a pain to calculate.  

Thankfully, a significant recent development is an alteration in the method of calculating holiday pay for part-year workers, reverting back to the 12.07% system. This change, while seemingly straightforward, has implications for both employers and employees in the part-year sector.

What is the 12.07% rule?

The 12.07% rule is a method to calculate holiday pay for part-year workers, typically those on zero-hour or irregular contracts. It’s based on the principle that these workers, on average, work 46.4 weeks per year (52 weeks minus 5.6 weeks of statutory holiday). Therefore, their holiday pay is calculated as 12.07% of their total earnings (5.6 weeks divided by 46.4 weeks).

What industries and workers are likely to be impacted?

Businesses which often you part-year workers include Early years education, Hospitality, Leisure, and Care. 

When does this change take place?

The change back to the 12.07% rule will vary between employers. The change will take place at the beginning of the employers’ holiday year following April 2024. This means if you have a holiday year of January the change will not take place until January 2025. Our top tip for employers who might be struggling with this is to change your holiday year to April to March, by doing this the change will come into effect in April 2024.

Implications for Employers

Employers will need to adjust their payroll systems and policies to align with this change once it comes into effect. It’s crucial to ensure accurate and compliant calculations of holiday pay. Employers should also be aware of the potential financial implications, as this might alter the holiday pay entitlement for some employees, leading to adjustments in budget allocations.

Impact on Employees

For part-year workers, this change provides a more predictable and transparent method for calculating their holiday entitlement. It ensures that they receive a fair proportion of holiday pay relative to their working hours. Employees should review their pay slips and speak with their employers if they have questions about how their holiday pay is calculated.

Best Practices for Implementation

1. Review and update payroll systems to ensure they are set up to calculate holiday pay at 12.07% for part-year workers.

2. Communicate the changes to all affected employees, explaining how their holiday pay will be calculated when the change takes place.

3. Train HR and payroll staff on the new calculations to ensure compliance and readiness to answer any queries from employees.

4. Document the changes in company policies and employee handbooks.

The return to the 12.07% method for calculating holiday pay for part-year workers marks a significant step in simplifying employment law compliance for businesses. By understanding and implementing these changes effectively, employers can ensure fair and lawful treatment of their part-year workforce, maintaining compliance and fostering a transparent working environment.

For more information or assistance, contact us at info@orchardemployementlaw.co.uk

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New Rights on the Horizon for Workers on Zero-Hour Contracts and Unpredictable Working Patterns

An Employment Law Change Aimed at Worker Security
September 2024 will see the introduction of The Workers (Predictable Terms and Conditions) Act 2023, a pivotal change in UK employment law.

Understanding the Act

What is The Workers (Predictable Terms and Conditions) Act 2023?
This legislation grants all UK workers, especially those on zero-hours, fixed-term contracts of less than 12 months, and temporary contracts including agency workers, the legal right to request a more predictable working pattern.

Requests for Predictability: How and What?
The new statutory right enables workers to request more predictable work patterns, focusing on certainty in work hours and times. Workers must submit these requests in writing, and employers are required to respond within a month. Although requests can be declined, employers must base their decisions on specific grounds such as additional costs or insufficient work.

Grounds for Refusing Requests
Employers can refuse requests for predictable working patterns based on:

  • Burden of Additional Costs
  • Inability to Reorganise Work Among Existing Staff
  • Inability to Recruit Additional Staff
  • Detrimental Impact on Quality or Performance
  • Insufficiency of Work During Requested Periods

It’s crucial for employers to handle these requests reasonably (though the definition of ‘reasonable’ is yet to be clarified) and notify workers of their decision within a month.

Industries Most Impacted
This Act will notably affect sectors like hospitality, retail, healthcare, education, the gig economy, and industries with project-based or seasonal work. These industries will need to carefully balance operational needs with workers’ new rights.

Practical Steps for Employers

  1. Understand the New Law: Educate yourself and your team about the Act’s specifics.
  2. Train Your Team: Prepare your HR and management teams to respond appropriately to requests.
  3. Audit Your Business: Assess how many staff could be impacted by this change.
  4. Review Contracts and Work Patterns: Anticipate potential requests and plan how to accommodate them.
  5. Stay Informed: Look out for the upcoming Acas Code of Practice for more guidance.

Need Advice, Training or an Employment Law Update?
For bespoke training or advice on this topic, reach out to us at info@orchardemploymentlaw.co.uk. For further information or support with Employment Law or HR, visit our website at http://www.orchardemploymentlaw.co.uk.

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Understanding Equal Pay: Lessons from Birmingham City Council’s Bankruptcy

The recent bankruptcy filing by Birmingham City Council, following settlements for Equal Pay claims that totalled over £760 million, has highlighted the critical importance of adhering to Equal Pay regulations. This event serves as a significant reminder for all employers regarding the financial risks associated with non-compliance.

What is Equal Pay?

Equal Pay is a principle set out in the UK’s Equality Act 2010, stating that men and women performing equal work must receive equal pay. The work does not have to be identical but must be considered ‘like work,’ ‘work rated as equivalent,’ or ‘work of equal value.’ Failure to comply can lead to not just back payments but also significant fines.

Practical Steps for Employers

Regular Pay Audits

One of the most effective ways to ensure you’re abiding by Equal Pay laws is by conducting regular pay audits. These audits should aim to uncover any unjustifiable pay disparities among employees performing the same or similar roles.

Maintain Transparency

A transparent pay structure can serve as a preventive measure against potential legal action. Make it clear how pay scales and bonuses are calculated and awarded, so employees know where they stand.

Training and Awareness

The responsibility of ensuring compliance doesn’t just lie with HR. Make sure that your management teams are also well-versed in the complexities of Equal Pay regulations to prevent unintentional violations.

Consult Legal Experts

Given the intricacies involved in employment law, it’s often prudent to seek expert legal advice, particularly when implementing changes to your pay structure to address any discovered pay disparities.

Why It Matters

The case of Birmingham City Council highlights that Equal Pay is not merely a matter of legal or ethical responsibility. It’s essential for the financial sustainability of your organisation. Ignoring this vital aspect can result in severe financial repercussions and tarnish your reputation irrevocably.

In summary, proactively addressing Equal Pay in your organisation is not just the right thing to do; it’s a business imperative. Ignoring it could be financially ruinous, as demonstrated by the unfortunate case of Birmingham City Council.

For further advice and a consultation, feel free to contact us at http://www.orchardemploymentlaw.co.uk

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What to Do When Your Employees Are Stranded Abroad: A UK Employer’s Guide

With the recent disruptions at UK airports and issues facing Brits stranded across Europe, many UK employers are faced with the challenging situation of having employees who are unable to attend work due to circumstances beyond their control. In such instances, what are an employer’s obligations and what steps can be taken to minimise disruption in the workplace? Below are some key points to consider.

Communication is Key

First and foremost, maintain open lines of communication with your stranded employees. Be sympathetic to their situation and aim to keep dialogue constructive and focused on solutions.

Review Employment Contracts and Policies

It’s crucial to refer to the terms of employment contracts and any applicable policies, such as ‘Adverse Weather and Travel Disruption Policy,’ to determine both parties’ rights and obligations. Some contracts may contain clauses that deal explicitly with absences due to extraordinary circumstances, including an inability to return from abroad due to travel disruptions.

Flexible Working Arrangements

One potential solution is to assess the feasibility of the stranded employees working remotely. If the work can be done online and the employees have access to a reliable internet connection, this could be a viable temporary solution.

Paid or Unpaid Leave?

Whether the absence should be paid or unpaid can be a complicated issue and often depends on the specific terms of the employment contract. Employers may:

  1. Offer to Use Annual Leave: Employees may opt to use their annual leave days to cover the period they’re stranded.
  2. Unpaid Leave: In the absence of a contractual obligation, there is generally no requirement to pay employees who are unable to work due to being stranded abroad.
  3. Discretionary Paid Leave: Employers may choose to offer discretionary paid leave, especially if the situation is expected to be resolved quickly.

Alternative Staffing Solutions

It might be necessary to temporarily re-allocate tasks among existing staff or hire temporary staff to cover for the stranded employees. This can help minimise the disruption to your business operations.

Health and Safety Concerns

For employees who are stranded, their well-being is a top priority. Employers should remain informed about the conditions their employees are facing and offer support where possible, such as assisting with finding local accommodation or supporting with essential needs.

Legal Obligations

In the event that the absence becomes prolonged, employers should consult with legal professionals to understand any potential ramifications, such as the possibility of ‘frustration of contract’ in extreme situations.

Summary

While the situation can be stressful for both the employer and the stranded employee, it’s essential to approach it with a sense of fairness, flexibility, and understanding. Consult your legal advisors and HR teams to navigate the situation in compliance with UK employment laws and the specific terms of your employment contracts.

For more tailored advice or if you have specific questions contact us at http://www.orchardemploymentlaw.co.uk

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The Impact of the new Flexible Working Bill on UK Businesses

The Flexible Working Bill received Royal assent on 24th July 2023, the changes and impact will not come into effect until 2024 but we like to stay ahead of the curve. In this blog, we will explore the implications of this bill on UK businesses, employees, and the broader work culture.

1. Understanding the Flexible Working Bill

The Employment Relations Flexible Working Bill was designed to change the way we work, it recognises some of the challenges felt by some groups of working people and in theory makes it easier for employees to ask for flexible working. 

We can’t talk about the Flexible Working Bill without explaining what Flexible Working is:

Flexible Working is moving away from the traditional need to be in the office or place of work 9 am to 5 pm at least 5 days a week. Some examples of flexible working include:

  • Working from home sometimes or at all times.
  • Changing working hours could be a reduction of hours, working core hours or condensing shift patterns.
  • Job sharing.
  • Moving from full-time to part-time.

Our view is that although employees will be able to request flexible working more often and potentially sooner than before, the reality of the impact may not be as strong as intended. Here’s why:

2. The Right to Request Flexible Working from Day One

At the moment, an employee only has the right to make a flexible working request once they have 26 weeks of continuous service.

The new Flexible Working Bill means that employees will still need 26 weeks of service in order to make this request BUT… the government has suggested that they might reduce this to a Day One right in another bit of legislation.

We will keep an eye out for the ‘Day One change and blog about it if and when it happens.

3. Two month time limit for an employer to respond.

When the new Flexible Working Laws come into effect employers will have to respond to flexible working requests within 2 months unless an extension has been agreed.

4. Employees can make more than one request.

At the moment, employees can only make one request in a 12-month period, the new laws on flexible working will allow people to make two flexible working requests within a 12-month period.

5. Employers will need to consult with employees and provide an explanation as to why a request is or is not approved.

There is no obligation for employers to make flexible working arrangements but they should consider and discuss these requests in a fair and reasonable manner. However, there is no minimum standard on what is fair and reasonable.

6. Potential Impact on Employers

While the bill represents a step towards a more adaptable and modern work culture, it may pose challenges for some employers. These challenges include:

a) Operational Adjustment: Businesses may need to re-evaluate their operational processes to accommodate flexible working arrangements while ensuring productivity and efficiency are maintained.

b) Managing Workloads: Employers must ensure that workloads are distributed equitably among employees, regardless of their working patterns, to prevent burnout and maintain a healthy work environment.

c) Communication and Team Cohesion: With employees working at different times or locations, effective communication becomes crucial. Employers should consider investing in suitable technologies and strategies to foster collaboration and maintain team cohesion.

d) Legal Compliance: Companies need to navigate the legal aspects of the bill carefully to avoid potential disputes or non-compliance issues.

7. Benefits for Employers

Despite the challenges, the Flexible Working Bill also presents several benefits for employers:

a) Attracting Talent: Offering flexible working options can make a business more attractive to top talent, leading to higher retention rates and improved recruitment prospects.

b) Enhanced Employee Engagement: Empowering employees with flexibility can boost their morale, job satisfaction, and overall engagement with the company.

c) Productivity and Performance: Studies have shown that employees with flexible working arrangements can be more productive and deliver higher-quality work.

d) Cost Savings: Embracing flexible working may allow businesses to reduce office space requirements, resulting in cost savings.

8. Employee Perspectives

The Flexible Working Bill is likely to be well-received by employees for the following reasons:

a) Improved Work-Life Balance: Flexibility enables employees to better manage personal commitments and achieve a healthier work-life balance.

b) Reduced Commute: Flexible working can significantly cut down commuting time, leading to less stress and a positive impact on the environment.

c) Individual Needs Consideration: Employees with specific needs, such as parents or individuals with health conditions, can tailor their work arrangements to suit their circumstances.

Conclusion

As the Flexible Working Bill becomes law, it opens up a new chapter in UK employment practices, shedding light on adaptability and employee well-being. 

While employers may face initial challenges, embracing flexible working can yield numerous benefits for both the workforce and businesses. By carefully navigating the legal landscape and proactively implementing suitable strategies, companies can thrive in this new era of work.

In reality, as there is no minimum standard of consultation and employers can still refuse flexible working requests, we may see less change than anticipated.

For expert guidance on understanding and implementing the Flexible Working Bill, reach out to our Employment Law and HR experts today at http://www.orchardemploymentlaw.co.uk

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An employers guide to surviving the summer holidays

Orchard Employment Law

The summer holiday period can be difficult for UK employers as you try to juggle the need to keep business functioning whist addressing the need of employees who are parents.

In this blog you will find 6 practical tips on how to manage the 6 weeks summer holidays without grinding your business to a halt.

But first here is a brief overview of your staff rights and employer rights when it comes to holidays.

All employees are entitled to paid annual leave. UK employment law states that full time employees are allowed  minimum of 28 days paid holiday and part-time employees are the equivalent leave based on the number of hours they work.

From a HR perspective annual leave is a good thing. Your staff work better when they have regular breaks and it is good for morale. Although the employment law gives employees the right to have time off…

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6 Facts about Providing a Workplace Reference

It’s a common practice for new employers to request a written reference or a person’s ability to do the work as well as their character before employing someone. We often hear concerns from ex-employers about what they can and can’t say in a reference so in this blog we debunk some myths and give you some facts about references.

  1. An employer does not have to provide a reference

There is no legal requirement for an employer to provide a reference unless the employee worked for a regulated industry such as financial services

  1. A reference is confidential 

References are confidential between the person providing the reference and the person who receives it. This is to encourage people to give an honest account of how the employee worked. 

This means there is no legal right for an employee or candidate to see the reference but they may be able to request information under a subject access request.

  1. An employer can choose the format or the reference.

Sometimes prospective employers will ask the referee to complete a form. This can be helpful and may help the prospective employer to decide whether or not to hire the candidate. That being said, the referee can decide whether or not they want to fill the form out and which questions they wish to answer.

  1. You can give a ‘Bad Reference’

References should be factual which means that you can give a ‘bad reference’ if it is based on the truth. This may include things such as

  • ‘the employee left pending investigation’
  • ‘The employee was dismissed for gross misconduct
  • ‘The employee had poor punctuality’

An employer should not say things which cannot be proved. Proof could be warning letters, investigation notes or even an attendance record. Sometimes refusing to give a reference is seen as being a bad reference.

It is worth noting that an employer can give their opinion on a person’s suitability for the new role.

  1. A reference should not comment on a person’s protected characteristics.

Protected characteristics are things which a person should not be discriminated against. They include:

  • Age
  • Gender
  • Sexual orientation
  • Marital status
  • Religion or belief
  • Disability
  • Race and ethnicity
  • Pregnancy or Maternity
  • Gender reassignment
  1. What can I do if I receive a negative reference after the person has started working with me?

You can dismiss someone if you receive a negative reference once you have hired the person. Care should be taken and procedures should be followed. Always take advice before dismissing someone for having a poor reference.

Did you know that we provide HR and employment law support for businesses? For more information contact us at info@orchardemploymentlaw.co.uk

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9 FAQ’s about Employment Tribunals for Employers

You have received an employment tribunal. Orchard Employment Law answers to 8 frequently asked questions.

  1. What is an Employment Tribunal?

An Employment Tribunal is a court of law. The proceedings of an employment tribunal are less formal than a court but the decisions are legally binding.

  1. I have received an Employment Tribunal notice of claim what do I do?

If your business receives an employment tribunal claim form you will need to ensure that you respond to the claim by the date which is printed in the letter. The Claim form known as the ET1  will set out what the employee is claiming. The employer should return the response form also known as the ET3.

The response form can be submitted online or by post. This is a very important document because the judge may refer to it at the tribunal hearing.

  1. Do I have to be represented by an Employment Lawyer?

There is no legal requirement for employers or employees to be represented by a lawyer in an Employment Tribunal. In fact, tribunals are set up in a way which should allow anyone to pursue or defend a claim by themselves. 

There are some benefits to being represented. An Employment Law Specialist is likely to know the procedures and arguments which could help you to win your case. They will have experience of similar cases or knowledge which could mean that you end up with a better outcome.

Often, a tribunal requires a lot of paperwork and an Employment Law business will know just how to manage that.

  1. How much will an Employment Tribunal claim against my business cost?

There are two types of costs to consider when defending an employment tribunal claim. 

One is the cost of being represented can range between £5,000 and £20,000 to defend your claim. Each representative will have their own pricing structure. 

At Orchard Employment Law we offer both fixed fees and hourly rates to our clients.

Here is an example of costs you can expect with Orchard Employment Law

Tribunal Case Based on Complexity:

Simple 1-2 Days
Medium 2-4 Days
Highly Complex 5+ Days





£5,500 -£11,000



£8,500 – £17,000



£17,000 plus
  1. I am attending an Employment Tribunal as a witness will I have to give evidence?

We always say that evidence is only as reliable as the person giving it. Although you will be required to provide a written statement of evidence you will also have to answer questions. Questions might be asked by the opposing person, their representative and the Employment Judge.

You might also be asked questions by your own representative.

  1. Do I have to give an Oath like in the TV shows?

Witnesses at an Employment Tribunal can either choose to give an Oath or an affirmation before giving evidence.

An oath is a religious promise to tell the truth and an affirmation is a non-religious promise to tell the truth. Neither one is considered more trustworthy than the other.

  1. Will I get to see all of the evidence before the Employment Tribunal hearing?

There should be no ambush or Aha moments in an Employment Tribunal. The Employment Judge will make an order for all parties to exchange evidence and 

witness statements before the hearing. That way everyone can feel prepared.

  1. Do I have to attend the Employment Tribunal in person?

Employment Tribunals have been hearing cases via a secure video link since the pandemic. Sometimes the Judge may insist on the hearing taking place at an Employment Tribunal Hearing Centre. They are dotted all around the country so there should be one near you.

  1. How can I engage with Orchard Employment Law to act on behalf of my business?

Get in contact with us at www.orchardemploymentlaw.co.uk/contact and we will schedule you for a paid consultation. You will be told what your chances of success are and how much the case is likely to cost.

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What is the scoop with Bank Holidays and UK Employment Law?

Traditionally each year the UK has 8 recognised bank holidays. However, this year the UK will have 9 bank holidays courtesy of the King’s coronation. We thought we would take this opportunity to give you the scoop on bank holidays and Employment Law.

Bank holidays also known as Public holidays started off in 1871 with banks closing across the UK, over time this lead to businesses and schools closing and in turn employees getting some time off. 

As time has moved forward and we have become more of a 24/7 society. We have seen more shops, restaurants, hotels and other businesses opening on a bank holiday. Most public sector organisations are still close on a bank holiday. So we answer some frequently asked questions about employee holiday allowance.

How much holiday are employees allowed to have in the UK?

In the UK all full-time employees are allowed to have a minimum of 28 days of annual leave each year. 

Part-time staff are able to have 28 days pro rata each year.

Part-year workers such as zero-hours workers, casual workers and term-time-only workers can have 5.6 weeks each year. (this entitlement currently starts on day one of working thanks to case caller Harper and Brazel)

Do I have to give an extra holiday days holiday this year because of the King’s Coronation?

Well.. that depends on the wording of the contract (by the way, make sure you have a contract with staff as it is a legal requirement.

If the contract is silent on holiday then it will be assumed that the 28 days include bank holidays. So there would be no additional leave given for the King’s coronation. If you are closed then staff will need to take the day out of their annual leave.

The same applies to contracts that state staff can have 28 days of holiday including bank holidays.

If the contract says something like, 20 days annual leave plus bank holidays then you would need to pay staff for the extra bank holiday this year.

But remember that these are minimums, not maximums. You can always give your staff extra holiday if you choose to.

Do staff get extra pay for bank holidays?

Back in the day, it was common for staff to receive paid incentives to work on a bank holiday. This could be anything from time and half to triple time. This has become less common now.

There is no legal requirement to pay extra on a bank holiday but you can if you wish.

Be mindful that if you do pay extra for bank holidays over a period of time that this could become contractual by conduct.

If I open on a bank holiday do my staff have to work?

Once again, this will depend on the wording of the contract but generally speaking, a bank holiday is a normal day of work if the business is open.

What about staff who don’t usually work on Mondays?

For staff who do not work on a Monday this will be a normal day off. They will be able to have the same annual leave entitlement as everyone else and if that is 28 days of leave then they can take the day sometime later.

We hope you really enjoy your bank holidays, whatever you do. For more help with Employment Law or HR contact us at http://www.orchardemploymentlaw.co.uk