This week, the Government confirmed its intention to make some important changes to aspects of UK employment laws as a result of Brexit. The proposed reforms are intended to grow the economy and reduce costs for businesses, and “unnecessary red tape and regulatory burdens” following the UK leaving the EU.
The Government has also confirmed that it will not be ‘sunsetting’ thousands of EU-derived laws which were due to expire automatically at the end of this year. It will, instead, be providing a list of laws that will be removed from UK law. This decision was made following concerns raised by opposition parties and trade unions in relation to whether the deadline was realistic.
Kemi Badenoch, Business and Trade Secretary, commented on the reforms:
“I have listened to the concerns of business of all sizes and have made it a priority to tackle the red tape that holds back UK firms, reduces their competitiveness in global markets and hampers their growth.
“We are taking back control of our laws after Brexit, reducing and improving regulation and giving businesses the freedom to do what they do best – sell innovative products, create jobs and grow the economy.”
The reforms have been set out in the policy paper ‘Smarter Regulation to Grow the Economy’, published by the Department for Business and Trade on 10 May 2023.
We have summarised the changes below.
Working Time Regulations (WTR)
The policy paper states that the Government will consult on reducing “time-consuming and disproportionate reporting requirements” for specific elements of the working time regulations that force organisations to keep working time records for most of its workforce. Under current laws, businesses are required to keep these to ensure that they adhere to the 48-hour working time limit.
Additionally, the Government has proposed to:
- Implement rolled-up holiday pay, so that employees are able to receive holiday pay with every payslip; and
- Combining ‘basic’/’normal’ and ‘additional’ leave entitlements under the WTR into one entitlement to annual leave, while maintaining the same amount of leave entitlement overall.
General Secretary of the Trades Union Council (TUC), Paul Nowak, criticised these Government reforms, claiming that they are “a gift to rogue employers looking to exploit workers and put them through long, gruelling shifts without enough rest”.
On the changes to holiday pay, he added:
“The current law ensures that most holiday is paid in line with workers’ normal earnings, including regular overtime. Ministers shouldn’t be meddling with this.”
Transfer of Undertakings (Protection of Employment) (TUPE)
With regards to TUPE, the Government intends to remove 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
The policy paper also outlined potential changes to non-compete clauses. The paper notes the important role that these clauses can play in protecting companies, however, they have unnecessarily become a default part of too many employment contracts. As a result, non-compete clauses often mean that workers won’t look around for better-paid employment and restricts businesses’ ability to compete and innovate their organisation.
Due to this, the Government has stated that it intends to restrict the time length of non-compete clauses to three months. It is believed that this reform will impact around five million UK workers and will be introduced ‘when Parliamentary time allows’.
The Government intends to release consultations on these proposed reforms.
Comment
The reforms to working time rules and TUPE have been anticipated since Brexit and so will not be a surprise to most (although the limited extent of changes to the TUPE regime might be).
The u-turn on the “sunset” provisions will have caused upset amongst the keen Brexiteers who wanted EU-derived laws repealed more widely but the proposed new provisions mean everyone (including employers) can be reassured that there will not be any unintended consequences.
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Laura Kearsley is a Partner in our expert Employment Law team.
If you would like any advice concerning the subjects discussed in this article, please contact Laura or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form.
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