03/01/2024

The Working Time (Amendment) Regulations (Northern Ireland) 2023 were made on 21 December 2023 and came into force on 1 January 2024. They amend the Working Time Regulations (Northern Ireland) 2016 in respect of:

Regulation 15 (Entitlement to annual leave)

Regulation 16 (Entitlement to additional annual leave)

Regulation 20 (Payment in respect of periods of leave)

In summary the Regulations expressly provide for rights to carry over holiday into subsequent leave years where certain circumstances apply. The Regulations also clarify what amounts to ‘normal pay’ for purposes of 4 weeks annual leave.

Whilst the Regulations codify the existing case law – they also go further by placing obligations on employer to encourage workers to take leave and to inform workers that they if they don’t, the leave will be lost.

Carry forward of leave

1. The Regulations provide that workers can carry forward annual leave to the end of the next leave year if they cannot take it as result of Family Related Statutory Leave (maternity, and other specific family-related leave).
2. They also provide that where workers have been unable to take annual leave due to sick leave, they can carry forward annual leave provided it is taken within 18 months of the end of the original leave year.

3. Finally the Regulations also allow a worker to carry forward leave if the Organisation has failed to:

• recognise the worker’s right to leave;
• give the worker a reasonable opportunity to take the leave or did not encourage them to take it;
• has not informed the worker that any leave not taken would be lost

Calculation of 4 weeks’ holiday pay

The Regulations also clarify what must be included in a week’s pay for 4 weeks’ holiday (‘normal remuneration’):

• commission payments, which are intrinsically linked to the performance of tasks which a worker is obliged to carry out under the terms of their contract;
• professional or personal status relating to length of service, seniority or professional qualifications
• overtime payments, which have been regularly paid to a worker in the 12 weeks preceding the calculation date.

COMMENTARY

The Department for Business & Trade has published Guidance on ‘Holiday pay and entitlement reforms from 1 January 2024’ which applies to GB but Paragraph 4 (Carryover of leave) and Paragraph 5 (Holiday pay calculations) could help understand the new NI Regulations.

As this is start of a new leave year for many Organisations (those who use January – December) it is a good time to review your holiday policy and ensure employees know that leave not taken will be lost.

Organisations should also train managers to keep leave entitlement under review, encourage workers to take their leave and inform them it will be lost if they do not take it (unless above circumstances apply).

In terms of what constitutes regular overtime the Regulations state the reference period to be used is the 12 weeks preceding the holiday. This means that the law in Northern Ireland has now set the reference period at 12 weeks (52 weeks applies in GB); if an employee works overtime regularly (or receives payments such as commission) in the 12 weeks immediately preceding a holiday then these payments should be included in the calculation of holiday pay.

We appreciate many organisations may currently use a different reference period. The updated Regulations do not apply retrospectively (i.e. they should not open the possibility of historical claims where a different reference period has been used), but organisations should review the reference period used going forward. Where a different reference period has been agreed, for example, with a recognised Trade Union, it is likely the Regulations will supersede any such agreement and discussions should be opened on this point as soon as possible.