The policy paper Smarter Regulation to Grow the Economy, published on 10 May 2023, gave us a first glimpse of how the government plans to reform employment law post-Brexit – as explained in our previous article. Only two days later, on 12 May 2023, the consultation paper on Retained EU Employment Law and the proposed reforms was published. Separately, and unconnected with reform of EU-derived laws, the government has published more detail on its proposed reform of non-compete clauses (which we have written about here).
The consultation confirms that rolled up holiday pay will be allowed.
The term “rolled-up” holiday pay refers to a system in which employers include an employee’s holiday pay within their basic pay (i.e. they “roll” the two payments together). This means that when a worker takes holiday, they do not then get paid holiday pay.
Back in 2006, the ECJ ruled that rolled-up holiday pay is incompatible with the Working Time Directive as it was thought that not paying people when they took holiday would discourage them from taking time off. Despite this, several organisations have continued to run such a scheme especially when they engage casual...
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