Scots lawyer issues contracts warning as post-Brexit rules edge closer

Daniel Gorry, Director in the Employment Law team at Scottish legal firm Lindsays

COMPANIES across Scotland are being urged to check that employment contracts – particularly those for seasonal staff – remain legal as a raft of post-Brexit legal changes come into force.

Long-awaited new UK Government rules surrounding working time regulations, holidays and the transfer of staff are due to take effect early this year (2024).

And an employment lawyer has warned that employers could easily find themselves on the wrong side of the law – putting themselves financially at risk if they were to face a tribunal or other legal action – unless they check their policies and procedures. 

Daniel Gorry, a Glasgow-based Director in the Employment Law team at Scottish legal firm Lindsays, said: “These new rules will bring changes which are likely to have a significant impact on employers who use irregular hours workers and those in sectors which engage seasonal or part-year workers.

“That could leave operations in hospitality, food production and care – for example – among those which may be particularly vulnerable to inadvertent issues.

“It is important, therefore, that employers ensure they keep track of legislation as it comes into force and take steps to ensure they comply with it.”

December 31 was the date on which all retained pieces of European Union law in the United Kingdom automatically expired – unless legislation was brought in to retain them.

The Employment Rights Regulations 2023 published at Westminster – and applicable across the UK – did that. It makes a number of changes to existing laws as well as reinstating some EU rules.

MPs are expected to bring it into force soon after the festive Parliamentary recess at Westminster.

Among the most critical changes are those surrounding holiday rights for workers with seasonal or irregular hours, which apply after holiday years beginning April 1 2024.

They include a new Working Times Regulations method of holiday accrual for workers with irregular hours or who only work part of the year.

Employers will be permitted to calculate holiday entitlement for irregular hours and part year workers as 12.07% of the hours worked in any pay period. This does not impact how holiday entitlement should be calculated for regular hours workers.

Holiday pay calculations will also change.

Under the annual holiday entitlement of 5.6 weeks, workers are entitled to their normal pay for their four weeks’ EU leave entitlement, which includes overtime pay, commission and allowances. But the 1.6 weeks of additional leave, in most circumstances, is limited to basic pay only. 

Mr Gorry said: “It is intended that the changes will be a welcome simplification of what is usually a complex area for both employers and workers – and, while some concerns have been raised regarding the new definition of an ‘irregular hours worker’, it is hoped that this will be a step in the right direction towards making the process smoother. 

“It will be important to take stock in the coming months and determine what, if any, changes need to be made within businesses.

“With that in mind, employers should review whether their current contracts, practices, and procedures reflect the changes brought on by the regulations, particularly the new 12.07% accrual rules and the rolled-up holiday pay option.” 

The changes also remove the current requirement for employers to maintain records of working hours and rest records for all employees, even if they work regular hours as long as employers can demonstrate compliance with the Working Time Regulations in another way.

A shift in TUPE regulations will allow businesses with less than 50 employees and businesses of any size undertaking a small transfer – of fewer than 10 employees – to consult directly with staff if there are no existing worker representatives. Where employee representatives, including trade unions, are in place, employers will be required to consult them. 

January 1 was also the date on which emergency coronavirus pandemic legislation which permitted the rollover of holiday pay for two years in certain circumstances ends.

Lawyers at Lindsays advise businesses across the country from their offices in Edinburgh, Glasgow, Dundee, Perth and Crieff.

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