Government announces “smarter regulation” employment law reforms
Released On 21st May 2023
The Government has announced a package of proposed employment law reforms in its policy paper “Smarter Regulation to grow the economy ”, published on 10 May 2023. These include plans for the Government to consult on changes to business record-keeping requirements and holiday calculations under the Working Time Regulations 1998 (‘WTR”), changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) and new legislation to limit non-compete clauses to three months.
The policy paper explains that the Government will consult on two proposals relating to working time:
- firstly, to remove the current requirement under the WTR for businesses to record working hours for every member of the workforce (while retaining the 48-hour week requirement); and
- secondly, to allow ‘rolled-up holiday pay’ (so that workers can receive holiday pay with every payslip) and merge the currently separate ‘basic’ and ‘additional’ leave entitlements under the WTR into one entitlement to annual leave (while maintaining the same amount of leave entitlement overall).
In addition, the Government will consult on whether to introduce an exception to TUPE to allow businesses with fewer than 50 employees and business transfers affecting fewer than 10 employees to consult directly with affected employees (rather than needing to elect employee representatives, as is the case currently). For Make UK subscribers, in practice, this is only likely to make a difference where there is transfer of part of a business.
The Government will legislate to limit the length of non-compete clauses to three months, with the aim of promoting competition and innovation in the UK. Non-compete clauses are included in employment contracts to restrict an individual’s ability to work for or establish a competing business after they have moved on from a job. The policy paper states that this legislation will be introduced ‘when Parliamentary time allows’.
The Government has also announced that it will no longer proceed with plans to automatically ‘sunset’ on 31 December 2023 all EU legislation which has not been expressly retained. (For a reminder of the Government’s original plans, see here). Instead, the Retained EU Law (Revocation and Reform) Bill now includes an express list of the retained EU laws which the Government intends to repeal at the end of 2023 (which currently include changes relating to posted workers and driving hours for road tankers).
How we can help
We will keep you updated on the progress of these proposed reforms on an ongoing basis. The Make UK policy team will continue to engage with Government regarding these proposals.
If you are a Make UK subscriber, you can speak to your regular adviser if you have any queries about working time and holiday, TUPE transfers and service provision changes and/or non-compete clauses. Our HR consultants are also very experienced in assisting companies with consultation processes (please email NKibble@makeuk.org for further information and see here).
If you are not a Make UK subscriber, contact us on 0808 168 5874 or email enquiries@makeuk.org.
