Employment Law: changes to Retained EU Law (Revocation and Reform) Bill & impact

On 10 May 2023, the government has announced proposals for change to retained EU employment law and their intention to make a significant change to the Retained EU Law (Revocation and Reform) Bill (‘the Bill’).

 

Vaishali Thakerar, Director
Head of Employment, Lawson West Solicitors

The proposals have been set out in the policy paper referred to as ‘Smarter Regulation to Grow the Economy’. This paper notes that the government is taking the ‘opportunity to improve regulation following our departure from the EU’, while maintaining UK labour standards.

The proposed changes, in summary, are:

• Working time– the removal of the requirement for employers to keep working time records for their workers.

• Statutory holiday – permitting ‘rolled-up holiday pay’ and merging ‘basic’ and ‘additional’ leave entitlements into one.

• TUPE– The removal of the requirement to elect employee representatives for the purpose of TUPE consultation for businesses with fewer than 50 employees and transfers affecting less than 10 employees, allowing businesses to consult directly with the affected employees.

• Non-compete clauses - Limiting the length of non-compete clauses to three months.

 

Firstly, a significant change to the Retained EU Law (Revocation and Reform) Bill which states that EU law that would have been automatically revoked on 31 December 2023 unless it was expressly retained is no longer applicable. Instead, now the reverse applies, so the current laws remain binding unless and until they are revoked. The government hopes this will provide some certainty for businesses, and while it commits to reviewing and amending EU laws, this new position allows for more time for proper assessment and consultation.

Secondly, the government has announced regulatory reform announcements specific to employment law in the areas that the working time and the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) apply:

• The UK’s Working Time Regulations 1998 (WTR) are derived from EU Law, whilst this provided valuable protections for workers it as been perceived as complicated and hard to understand. The reforms to the WTR were high on the government’s agenda post-Brexit. The announcement about reforms in this area is limited on its detail but appears limited to changes aimed at reducing the administrative burden around employers’ recording keeping requirements and to holiday entitlements and pay. There is no suggestion of any reduction to holiday entitlements. The government also intends to permit the use of rolled-up holiday pay, and to reduce the complexity and administration around how holiday pay is calculated. It is unclear what is actually meant by this, but as the calculation of holiday pay has become particularly complicated in recent years following case law on the inclusion of commission and overtime, this is one area where reforms will be welcomed by workers and businesses alike.

• The TUPE rules are similarly derived from EU Law, and while the government recognises that TUPE provides valuable protections for workers who work in businesses or services which transfer elsewhere, it intends to consult on changes to the information and consultation requirements. Under our current rules, there is an obligation to consult with elected representatives on all TUPE transfers unless the micro-business exemption applies (i.e., where the employer has fewer than 10 employees). However, in an attempt to reduce the burden on employers, the government will consult on removing these requirements for employers with fewer than 50 employees and transfers of fewer than 10 employees.

The announcement is referred to as the first in a series of regulatory reform announcements, and so we cannot rule out more proposed reforms affecting UK employment law in due course. hear more about the consultations on the WTR and TUPE proposals, or any other planned changes.

 

If you would like to seek legal advice on a particular matter, contact the Employment Team at Lawson-West Solicitors today.

With offices in Leicester and Market Harborough, we are a national provider of expert employment law advice and welcome a free discussion with you.

Please contact us on telephone 0116 212 1000 or 01858 445 480, alternatively complete our Contact Us form and we will get in touch as soon as possible.

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