Following Liz Truss’s appointment as the UK’s Prime Minister on 6, September, there have been numerous suggestions that there will be changes to the UK’s current employment laws, most specifically the Working Time Regulations (WTR) and Transfer of Undertakings (Protection of Employment) Regulations (TUPE), which derive from EU legislation.
Below, we have considered some of the employment law changes that could be implemented by Liz Truss and her cabinet and how these changes could impact employers and their workforce.
Review of derived EU laws
At the Conservative Party Conference in Birmingham on 5, September, Liz Truss confirmed that she was committed to reviewing all EU laws retained by the UK and reforming any that are perceived to be restricting the economy by the end of next year.
By 31, December 2023, all UK laws derived from its EU membership will be reviewed and then either:
- Transferred into UK law;
- Replaced with new UK laws; or
- Revoked with no UK equivalent law replacing it.
The Bill does not apply to all EU retained law but does apply to:
- Secondary legislation (e.g. regulations) which implement EU law (such as the WTR); and
- Derived-EU employment legislation contained in Acts enforced by regulations (such as some of the collective redundancy consultation requirements in section 188 of the Trade Union & Labour Relations (Consolidation) Act 1992).
The review of 2,400 pieces of retained EU law in force will take place under the Retained EU Law (Revocation and Reform) Bill, often referred to as the ‘Brexit Freedoms Bill’ (the Bill), which was introduced into Parliament on 22, September.
Whilst we won’t know until after the review which laws will be retained or revoked, it has been speculated that a number of retained EU laws could be impacted, including:
- The Working Time Regulations (WTR);
- Transfer of Undertakings (Protection of Employment) Regulations (TUPE);
- Part-Time Worker Regulations;
- Fixed-Term Employee Regulations;
- Agency Worker Regulations; and
- General Data Protection Regulation (GDPR).
It is worth noting that the Bill provides for extension periods from 31 December 2023 to June 2026, so some of these repeals could well be delayed.
In addition, comments made by the Secretary of State for Business, Energy, and Industrial Strategy, Jacob Reese-Mogg have led to speculation that businesses with fewer than 500 employees would be exempt from any EU laws which are retained after the review. These comments were then clarified by the Government which stated that this will only apply to ‘reporting requirements and other regulations’.
WTR
It is believed that there could be some reforms to the WTR, particularly in relation to holiday entitlement and the calculation of holiday pay as well as the definition of working time insofar as travel time and on-call time are concerned.
TUPE
It is not anticipated that there will be a whole-scale repeal of the TUPE regime but there could be some changes to TUPE rights, particularly with regard to post-TUPE contractual variations and harmonisation of terms.
Agency Worker Regulations
The Agency Workers Regulations, which require employers to offer agency workers equal terms and benefits after they have worked for 12 weeks, could be repealed under the Bill.
GDPR
Whilst not directly employment law legislation, it has been announced that the UK will scrap the GDPR, the EU’s data privacy regime, and replace it with an alternative system. This was confirmed by the Digital and Culture Secretary, Michelle Donelan, at the Conservative Party conference. Ms Donelan said that the new system will be simpler and clearer for organisations to deal with.
However, UK businesses will still be required to comply with GDPR if they do business in the EU. This will likely lead to increased costs for businesses who wish to trade in the EU as they will have to comply with two sets of legislation.
Removing reporting requirements
As stated above, the Government has indicated that it will exempt organisations with fewer than 500 employees from specific reporting requirements, such as gender pay gap reporting and executive pay ratio reporting. The current threshold for doing this is 250 employees.
However, the Government could go further with this as it has indicated that the threshold could be raised to 1,000 employees “once the impact of the current extension is known”.
Employee rights
According to reports in the Financial Times, Jacob Rees-Mogg is planning to dilute employee rights for those earning more than £50,000.
The reports suggest that the Business Secretary wants to implement no-fault dismissals for high earners, and also remove the current rules that allow agency staff to become permanent employees.
However, the Financial Times has said that the proposal was one of “several unworkable and half-baked ideas” that the Prime Minister has rejected, so it remains to be seen what, if any, employment rights will be reduced for workers.
Other changes:
- A reversal of the National Insurance increase of 1.25%, came into effect for working-age employees, their employers, and the self-employed in April 2022. This was confirmed last month.
- The reforms to off-payroll working rules for the private sector (IR35), only came into effect last year. It has already been confirmed that these rules will be repealed in April 2023.
- A short-term expansion to the Seasonal Worker temporary work route to support specific sectors that are experiencing labour shortages.
Comment
Given the number of retained EU laws in force, this review is a mammoth task and it seems highly likely that many decisions or implementations could well be delayed until June 2026.
Our advice to employers is to proceed with caution at this stage as there are no guarantees about what will change and how quickly the changes will be implemented.
How can we help
Laura Kearsley is a Partner in our expert Employment Law team.
If you would like any advice in relation to 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 enquiry form.
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