Changes to REC Complaints and Disciplinary Procedure
As you’ll be aware, the Working Time Regulations were amended earlier this year in relation to how holiday pay can be paid. The key changes included the legalisation of rolled up holiday pay for irregular hours workers and part year workers using the 12.07% calculation.
We wanted to use this update to provide a reminder about the changes as well as explaining how they’ve been reflected in the audit criteria. We’ve also taken the opportunity to lay out a further recent change to the audit criteria relating to a member’s own internal complaints procedures.
Please see our update below:
Rolled Up Holiday Pay
Following the changes to the Working Time Regulations, rolled up holiday pay is allowed but only where the leave year starts on or after 1 April 2024. It will also only apply to eligible workers – irregular hours or part year workers. For irregular hours workers, the hours worked under their contract must be wholly or mostly variable and for part year workers there must be at least one week during the year where the worker is not required to work and for which they are not paid. These terms must be provided for in the written contract. Holiday pay can be calculated at 12.07% of basic pay assuming holiday entitlement is 28 days. If the worker is entitled to additional holiday eg. under AWR, you will need to increase the holiday percentage appropriately. Please see the REC website Holiday Pay FAQs which also includes a table for accrual percentages rates where there is an increased holiday entitlement. You must also ensure that holiday pay is laid out separately on the worker’s KID, assignment details and payslip.
If the worker is not eligible for rolled up holiday pay as outlined above, you may be at risk if you pay holiday pay using the rolled up method with a holiday pay calculation of 12.07%. Where you continue to pay holiday in this way, you must ensure that you include a term in the contract confirming that holiday will be paid as an enhancement to the hourly rate and the enhancement must be clearly set out separately on the worker’s KID, assignment details and payslip.
Accrued Holiday Pay
If the worker is not eligible to have rolled up holiday pay or you choose to accrue holiday pay, the REC advises members to accrue holiday pay during each assignment and at the end of each assignment, you should pay the worker for all holiday accrued during the assignment less any holiday pay already paid for leave taken during the assignment. Holiday pay must be calculated by taking an average of the previous 52 worked weeks pay. You must also include a statement that reminds the agency worker that they must take their leave during the leave year otherwise any untaken leave will be lost. Please see the REC website Holiday Pay FAQs
Holiday pay and the audit criteria
As Audited holders, you’ll know that REC checks your contracts as part of the audit process and your contracts with work-seekers should clearly lay out the method you use for paying holiday pay. The REC will then provide you with a contract assessment, which covers any required amendments to your contracts and holiday pay arrangements.
Where the REC notes that your contract states your workers are irregular hours or part year workers, we will add an advisory note to your contract assessment saying that you must ensure that this reflects the reality of the worker’s work pattern. The REC Audited process only reviews your contract and not the working pattern of individual workers and so, REC Audited/REC Audited Education cannot confirm that your workers are eligible for rolled up holiday pay.
Where you have adopted the REC model contract 4 Terms of Engagement, clause 7 of the contract covers annual leave. You must ensure that this is amended to reflect how you are paying holiday pay,
Complaints procedures
As well as reflecting holiday pay changes in the audit, we have also strengthened the audit criteria around your own internal complaints process to ensure that it is easily accessible for your candidates and clients, such as, being available on your website. As agencies that operate to the highest standards, you’ll know that receiving complaints can be a good opportunity for process improvement and your customers will return to you if you give a good service including good complaint handling where it’s needed. This includes having an easily accessible and visible complaints procedure.
This year the REC is raising the profile of its compliance work with candidates, clients and other stakeholders. You can help us to do this by promoting the high standards you work to by displaying the REC Audited logo and your own internal complaints procedure on your website. We’re raising the profile of our compliance work in a number of ways including client engagement eg. with our Aim Hire guide and other publications. Aim Hire has proved very popular and we would recommend that you use it with your clients.
If you would like any further advice on the changes to holiday pay, please see the REC website Holiday Pay FAQs or contact the Legal Helpline.
If you have any further questions, please contact compliance@rec.uk.com