Consultation reforming the Working Time Regulations (WTR), holiday pay and Transfer of Undertakings Protection of Employment (TUPE)

On 12 May 2023, the Department for Business and Trade (DBT) published a consultation setting out proposed changes to the Working Time Regulations 1998, Transfer of Undertakings (Protection of Employment) Regulations 2006 and non-compete clauses.

Allowing rolled-up holiday pay

The proposal is to allow rolled-up holiday pay whereby holiday pay is paid as an enhancement to a worker’s pay at the time the worker performed the work instead of when they are on holiday. The proposal is to pay rolled-up holiday at 12.07% of pay as this is the proportion of statutory annual leave in relation to the working weeks of each year (annual leave entitlement is 12.07% of hours worked by a worker).

If employers choose to make rolled-up holiday payments, their employees should be informed of this change. Additionally, such payments should be clearly marked on each employee’s payslip.

Combining basic and additional leave entitlements 

It can be confusing to have two separate leave entitlements under the WTR. The consultation proposes to introduce a single annual leave entitlement of 5.6 weeks (as opposed to four weeks under Regulation 13, and an additional 1.6 weeks under Regulation 13A). The Consultation also provides for:

• Clarification as to the minimum rate of holiday pay and what counts as “normal remuneration”.
• Changing the method for calculating leave in a worker’s first year of employment.
• Removing the exemption which allowed carrying over of leave due to COVID-19.

Record-keeping 

Employers are currently required to maintain systems for recording actual daily working time for individual workers. It is being proposed by the government that such obligations are strenuous and potentially damaging to employee relations. As such, the proposal is to amend the WTR 1998 to remove any legal requirement for businesses to keep a record of their workers’ daily working hours.

TUPE consultation requirements for smaller businesses 

Unlike large businesses, smaller businesses with fewer than ten employees can inform and consult affected employees directly in the absence of existing appropriate representatives. The government’s proposal is to remove the requirement to elect employee representatives for the purposes of TUPE consultation for businesses with fewer than 50 employees, and businesses of any size involved in a transfer of fewer than ten employees.

The government’s motive is to prevent the unduly burdensome nature of this obligation on smaller businesses.


If you would like further advice on this matter, please contact our Employment Law Team or your usual contact at Stone King, who will allocate your query